Electrical and magnetotransport properties of nanocrystalline Nd0.7 Sr0.3 MnO3 sample having an average particle size of 45 nm have been studied. The resistivity in paramagnetic regime follows Mott's variable range hopping mechanism with an average hopping distance of about 21 Å. The observed magnetoresistivity (MR) has best been described by assuming that canted spins and defects are distributed all over the volume of the nanoparticle. The MR could be quantitatively best fitted to spin-dependent hopping model, together with phase-separation phenomenon. In this model, hopping barrier is proportional to the angle between the magnetic moments of the clusters. The hopping barrier height is minimum when the moments are parallel to each other and is maximum when the moments are randomly oriented. The fit yields a small cluster size of about two to three lattice constant dimensions in the paramagnetic (PM) phase and of about four to five lattice constants in the ferromagnetic (FM) phase. The results indicate that FM phase contributes to MR at low fields, whereas PM phase contributes at relatively high fields. © 2006 American Institute of Physics.