We study exciton and biexciton spectra in disordered semiconductor quantum wires by means of nanophotoluminescence spectroscopy. We demonstrate a close link between the exciton localization length along the wire and the occurrence of a biexciton spectral line. The biexciton signature appears only if the corresponding exciton state extends over more than a few tens of nanometers. We also measure a nonmonotonous variation of the biexciton binding energy with decreasing exciton localization length. This behavior is quantitatively well reproduced by the solution of the single-band Schrodinger equation of the four-particle problem in a one-dimensional confining potential.