By sequential feeding of catalyst materials, it is revealed that the active growth sites are at the bottom of the carbon nanotubes (CNTs), and that catalyst particles are constantly encapsulated into nanotubes from the bottom. This gives a better insight into the mechanism of CNT formation and on ways to control the growth process. CNTs encapsulated with different materials should enable the study of their electronic or magnetic properties, with potential applications as building blocks for nanoelectronics and as fillers in composites for electromagenetic shielding.