A "direct encapsulation" method was developed for the synthesis of highly stable water-soluble fullerene@gold core-shell nanostructures, with gold nanoshells showing either closed or porous morphology. This gold nano-shell coating formed a "nano-oven", capable of decomposing encapsulated fullerene molecules rapidly when irradiated by laser. We envisaged this being a useful tool for chemical reactions as well as a novel scaffold for nano-material synthesis. © 2011 The Royal Society of Chemistry.