Fullerene coalescence experimentally found in fullerene-embedded single-wall nanotubes under electron-beam irradiation or heat treatment is simulated by minimizing the classical action for many atom systems. The dynamical trajectory for forming a (5,5) C120 nanocapsule from two C60 fullerene molecules consists of thermal motions around potential basins and ten successive StoneWales-type bond rotations after the initial cage-opening process for which energy cost is about 8 eV. Dynamical paths for forming large-diameter nanocapsules with (10,0), (6,6), and (12,0) chiral indexes have more bond rotations than 25 with the transition barriers in a range of 10-12 eV. and "Y" and "T" junctions [4] have attracted much attention from scientists for last two decades due to their unique structural, mechanical, and electrical properties [5]. In particular, carbon nanotubes and related junctions have great potential for applications on nanometric electronic devices such as quantum functional transistors and rectifiers since nanotubes can be semiconductors or metals depending upon their chiralities and diameters [6]. At the moment, however, development of the nanotubebased technology is limited because delicate control of their structures is not yet feasible.Recently, merging processes between carbon nanostructures have been proposed as a new synthesis technique to construct more complicate functional structures: (1) Two nanotubes coalesce into diameter-doubled one in a high-energy (1.25 MeV) electron beam condition [7]. (2) In the same condition, initially crossed nanotubes are found to form some functional junctions shaped like "Y" and "T" characters [4]. Since each carbon atom is displaced approximately every 100 sec by knock-on collisions with the high-energetic electrons, the irradiationinduced vacancies may play a crucial role in these merging processes. Terrones and his coworkers [4,7] studied the vacancy-related merging mechanism utilizing the ordinary molecular dynamics technique. Though introducing various functional structures, this high-energy process may be not appropriate for nanometric device application because of the uncontrollable defect formation. (3) A low energy growth technique for nanotube bundles, where the chiral indexes of all individual nanotubes are almost perfectly mono-dispersed, was proposed in the mixture of C 60 molecules and catalyst Ni pillars with a help of a ∼1.5 T magnetic field [8]. The annealing temperature is just 950 • C. (4) In another low energy situation, a single-wall nanotube can be synthesized by merging fullerene molecules inside a nanotube vessel in nano-peapod systems [9,10]. Of special importance is the last technique of fullerene coalescence because it is a catalyst-free and bottom-up process, having a potentiality for diameter and chirality control of single-wall nanotubes.Nano-peapods [3] consist of array of fullerene molecules (inner peas) and a single-wall carbon nanotube (an outer pod), and all components are separated from the others by the van der Waals distance. Th...