Abstract: Composite (La0.67Ca0.33MnO3)(1-x):(MgO)(x) films were prepared by metalorganic aerosol deposition on a (100)MgO substrate for different concentrations of the (MgO) phase (0less than or equal toxless than or equal to0.8). At xapproximate to0.3 a percolation threshold in conductivity is reached, at which an infinite insulating MgO cluster forms around the La0.67Ca0.33MnO3 grains. This yields a drastic increase of the electrical resistance for films with x>0.3. The film structure is characterized by x-ray diffraction and transmission electron microscopy. The local structure of the La0.67Ca0.33MnO3 within the film depends on the MgO concentration which grows epitaxially along the domain boundaries. A different structural phase transition from the orthorhombic Pnma structure to an unusual rhombohedral R (3) over barc structure at the percolation threshold xapproximate to0.3 is found for La0.67Ca0.33MnO3. A three-dimensional stress accommodation in thick films through a phase transition is suggested.