The charge ordered La 1/3 Sr 2/3 FeO 3−δ (LSFO) in bulk and nanocrystalline forms are investigated using ac and dc magnetization, Mössbauer, and polarized neutron studies. A complex scenario of short-range charge and magnetic ordering is realized from the polarized neutron studies in nanocrystalline specimen. This short-range ordering does not involve any change in spin state and modification in the charge disproportion between Fe 3+ and Fe 5+ compared to bulk counterpart as evident in the Mössbauer results. The refinement of magnetic diffraction peaks provides magnetic moments of Fe 3+ and Fe 5+ are about 3.15 μ B and 1.57 μ B for bulk, and 2.7 μ B and 0.53 μ B for nanocrystalline specimen, respectively. The destabilization of charge ordering leads to magnetic phase separation, giving rise to the robust exchange bias (EB) effect. Strikingly, EB field at 5 K attains a value as high as 4.4 kOe for average size ∼70 nm, which is zero for the bulk counterpart. A strong frequency dependence of ac susceptibility reveals cluster-glass-like transition around ∼65 K, below which EB appears. Overall results propose that finite-size effect directs the complex glassy magnetic behavior driven by unconventional short-range charge and magnetic ordering, and magnetic phase separation appears in nanocrystalline LSFO.