Multimillion-atom molecular dynamics simulations of silicon diselenide nanowires are used to study mechanical properties and changes in nanowire structure under strain. The nanowires transform from a body-centered orthorhombic structure to a body-centered tetragonal structure under uniaxial strain, which causes an unexpected elongation in one of the transverse directions. For larger strains, the nanowires undergo a process of local amorphization, followed by fracture at one of the resulting crystalline-amorphous interfaces. The critical strain for fracture is 15%. Local temperature and stress distributions after failure are interpreted in terms of the local amorphization.