Lysozyme is one of the most commonly used proteins for encapsulating gold nanoclusters, yielding Ly-AuNC complexes. While possible applications of Ly-AuNCs in environmental, biological and trace metal sensing in solution have been demonstrated, there is currently a poor understanding of the physical characteristics of the Ly-AuNC complex. In this study we have employed fully atomistic molecular dynamics simulations to gain an understanding of the formation of Au clusters within the protein. It was found that in order to form AuNCs in the simulations, an approach of targeted insertion of Au atoms at a critical surface residue was needed. Tyrosine is known to be crucial for the reduction of Au salts experimentally, and our simulations showed that Tyr20 is the key residue for the formation of an AuNC beneath the protein surface in the α-helical domain. It is hoped these observations will aid future improvements and modification of Ly-AuNCs via alterations of the alpha-helix domain or Tyr20.