This paper reports that the Ge nanocrystals embedded in SiO2 matrix are grown on Si(100) and quartz-glass substrates, and the formation mechanism is systematically studied by using fluorescence x-ray absorption fine structure (XAFS). It is found that the formation of Ge nanocrystals strongly depends on the properties of substrate materials. In the as-prepared samples with Ge molar content of 60%, Ge atoms exist in amorphous Ge (about 36%) and GeO2 (about 24%) phases. At the annealing temperature of 1073 K, on the quartz-glass substrate Ge nanocrystals are generated from crystallization of amorphous Ge, rather than from the direct decomposition of GeO2 in the as-deposited sample.However, on the Si(100) substrate, the Ge nanocrystals are generated partly from crystallization of amorphous Ge, and partly from GeO2 phases through the permutation reaction with Si substrate. Quantitative analysis reveals that about 10% of GeO2 in the as-prepared sample are permuted with Si wafer to form Ge nanocrystals.