La 0.7 Sr 0.3 MnO 3 ) 1-x /(ZrO 2 ) 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 ZrO 2 grains separated from La 0.7 Sr 0.3 MnO 3 matrix. It has been found that the inclusion of ZrO 2 content 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 ZrO 2 grains are trapped between La 0.7 Sr 0.3 MnO 3 grains may be acting as a barrier for spin-polarized tunneling and enhance the low-field magnetoresistance.