The room temperature photoluminescence from ZnO/MgO core/shell nanowires (NWs) grown by a simple two-step vapor transport method was studied for various MgO shell widths (w). Two distinct effects induced by the MgO shell were clearly identified. The first one, related to the ZnO/MgO interface formation, is evidenced by strong enhancements of the zero-phonon and first phonon replica of the excitonic emission, which are accompanied by a total suppression of its second phonon replica. This effect can be explained by the reduction of the band bending within the ZnO NW core that follows the removal of atmospheric adsorbates and associated surface traps during the MgO growth process on one hand, and a reduced exciton–phonon coupling as a result of the mechanical stabilization of the outermost ZnO NW monolayers by the MgO shell on the other hand. The second effect is the gradual increase of the excitonic emission and decrease in the defect related emission by up to two and one orders of magnitude, respectively, when w is increased in the ~3–17 nm range. Uniaxial strain build-up within the ZnO NW core with increasing w, as detected by x-ray diffraction measurements, and photocarrier tunneling escape from the ZnO core through the MgO shell enabled by defect-states are proposed as possible mechanisms involved in this effect. These findings are expected to be of key significance for the efficient design and fabrication of ZnO/MgO NW heterostructures and devices.