We report on the formation of embedded B2-FeSi nanodots in -oriented Si substrates, and investigate the crystallographic mechanism underlying the stabilization of this uncommon, bulk-unstable, phase. The nanodots were approximately 10 nm in size, and were formed by iron thin film deposition and subsequent annealing. Cross-sectional transmission electron microscopy, energy loss spectroscopy mapping, and quantitative image simulation and analysis were utilized to identify the phase, strain, and orientational relationship of the nanodots to the host silicon lattice. X-ray photoelectron spectroscopy was utilized to analyze the surface composition and local bonding. Elasticity calculations yielded a nanodot residual strain value of -18%. Geometrical phase analysis graphically pinpointed the positions of misfit dislocations, and clearly showed the presence of pinned (11̄1̄)Si//(100) FeSi, and unpinned (2̄42)Si//(010)FeSi, interfaces. This partial endotaxy in the host silicon lattice was the mechanism that stabilized the B2-FeSi phase.