SiGe nanocrystals have been formed in SiO2 matrix by cosputtering Si, Ge, and SiO2 independently on Si substrate. Effects of the annealing time and temperature on structural and compositional properties are studied by transmission electron microscopy, x-ray diffraction (XRD), and Raman spectroscopy measurements. It is observed that Ge-rich Si(1-x)Gex nanocrystals do not hold their compositional uniformity when annealed at high temperatures for enough long time. A segregation process leading to separation of Ge and Si atoms from each other takes place. This process has been evidenced by a double peak formation in the XRD and Raman spectra. We attributed this phase separation to the differences in atomic size, surface energy, and surface diffusion disparity between Si and Ge atoms leading to the formation of nonhomogenous structure consist of a Si-rich SiGe core covered by a Ge-rich SiGe shell. This experimental observation is consistent with the result of reported theoretical and simulation methods.