Semicrystalline polymers under nanoconfinement show distinct structural and thermomechanical properties compared to their bulk counterparts. Despite extensive research on semicrystalline polymers under nanoconfinement, the nanoconfinement effect on the local crystallization process and the unique structural evolution of such polymers have not been fully understood. In this study, we unveil such effects by using coarse-grained molecular dynamics simulations to study the crystallization process of a model semicrystalline polymer—polyvinyl alcohol (PVA)—under different levels of nanoconfinement induced by nanoparticles that are represented implicitly. We quantify in detail the evolution of the degree of crystallinity (XC) of PVA and examine distinct crystalline regions from simulation results. The results show that nanoconfinement can promote the crystallization process, especially at the early stage, and the interfaces between nanoparticles and polymer can function as crystallite nucleation sites. In general, the final XC of PVA increases with the levels of nanoconfinement. Further, nanoconfined cases show region-dependent XC with higher and earlier increase of XC in regions closer to the interfaces. By tracking region-dependent XC evolution, our results indicate that nanoconfinement can lead to a heterogenous crystallization process with a second-stage crystallite nucleation in regions further away from the interfaces. In addition, our results show that even under very high cooling rates, the nanoconfinement still promotes the crystallization of PVA. This study provides important insights into the underlying mechanisms for the intricate interplay between nanoconfinement and the crystallization behaviors of semicrystalline polymer, with the potential to guide the design and characterization of semicrystalline polymer-based nanocomposites.