(La0.7 Sr0.3MnO3)1-x/(ZrO2)x (x=0.0–0.150, step 0.025) composites have been prepared via solid state reaction process. The X-ray diffraction and scanning electron microscopic observations indicate that there are ZrO2grains separated from La0.7Sr0.3MnO3matrix. It has been found that the inclusion of ZrO2content decreases the conductivity, magnetization and metal–semiconductor transition, whereas it increases the low field magnetoresistance. Possible effects of grain boundaries on the low field magnetoresistance have been discussed. The small ZrO2 grains are trapped between La0.7Sr0.3MnO3grains may be acting as a barrier for spin-polarized tunneling and enhance the low-field magnetoresistance.