Understanding the growth mechanism of heterojunctions in silicon-germanium alloy (Si-Ge) nanowires is helpful for designing adequate physical properties in the material for device applications. We examine the formation of the heterojunction in low Ge-content Si-Ge nanowires by an approach of thermal oxidation, which produces an atomically abrupt interface with an obvious concentration change. Forming heterojunctions in Si-Ge nanowires by this approach involves more complicated reaction routes than direct growth of heterojunction nanowires using the vapor-liquid-solid method. At the beginning of the oxidation process, the AuGeSi eutectic liquid at the nanowire tip significantly etches the Si-Ge alloy nanowires. Selective oxidation of Si results in a change of the relative amount of Ge to Si in the eutectic liquid, which further modulates the solubility of Ge and Si atoms. The compositional variation in the Au-Ge-Si ternary alloy system during the oxidation process accounts for the observed concentration profile in the heterojunction nanowire. The thermal oxidation approach is applied on a low Ge-content Si-Ge thin film that is coated with Au nanoparticles. Si-Ge nanodots, which exhibit a higher Ge concentration, are precipitated epitaxially in the film, as a result of compositional modulation in the AuGeSi eutectic liquid.