This paper presents an alternative approach to formulating a rational bar-elastic substrate model with inclusion of small-scale and surface-energy effects. The thermodynamics-based strain gradient model is utilized to account for the small-scale effect (nonlocality) of the bar-bulk material while the Gurtin–Murdoch surface theory is adopted to capture the surface-energy effect. To consider the bar-surrounding substrate interactive mechanism, the Winkler foundation model is called for. The governing differential compatibility equation as well as the consistent end-boundary compatibility conditions are revealed using the virtual force principle and form the core of the model formulation. Within the framework of the virtual force principle, the axial force field serves as the fundamental solution to the governing differential compatibility equation. The problem of a nanowire embedded in an elastic substrate medium is employed as a numerical example to show the accuracy of the proposed bar-elastic substrate model and advantage over its counterpart displacement model. The influences of material nonlocality on both global and local responses are thoroughly discussed in this example.