Radial anisotropy in small objects has been linked to exotic optical properties. It can be implemented with a spherical inclusion that manifests self-similarity. We show that, when a self-similar, onion-like structure with alternating layers is homogenized by using an effective material approximation, the homogenized material becomes uniaxially anisotropic with the axis of anisotropy pointed radially outward from the center of the inclusion. This radial anisotropy becomes exact in the limit of a dense set of layers. The exact equivalence of the layered self-similar inclusion and the radially anisotropic inclusion manifests itself both in the effective permittivities of the two inclusions-when homogenized over the entire volumes-and in the internal potentials. Because the layered sphere and the radially anisotropic sphere are analogous, it is possible to study some of the interesting scattering features of radially anisotropic spheres in a realistic configuration. In particular, we show that the outcome of homogenizing the self-similar inclusion, and consequently the electric response, depends on what the core material at the center of the inclusion is and that a continuous transition between the two homogenization models is possible. The findings suggest intriguing applications in nanophotonics.