The metal-insulator transition and the original magnetic phase that appear in vanadium oxide nanoclusters epitaxially embedded in an MgO matrix are studied via electron transport, magneto-resistance, and X-ray circular dichroism measurements. The metal-insulator transition temperature is observed to be in the range of 1.5-27 K. We observe, from 0.3 K to at least 125 K, a superparamagnetic behavior, whereas vanadium oxide, in its bulk phase, is reported to be anti-ferromagnetic (AF) at low temperatures. This striking feature is consistent with either ferromagnetic spin pairing or spin canting in the AF spin order along the 1D vanadium ion chains of the Magn eli phase or for the VO 2 (A)-like phase. Finally, the observed magneto-resistive effect, which reached up to 8% at low temperatures, indicates ferromagnetic behavior for some of the nanoparticles. This enables their integration in spintronic devices that could be combined with metal-insulator switching and magneto-resistive effects.