Epitaxial La0.7Ca0.3MnO3 thin films were grown on MgO (001) substrates by pulsed laser deposition. The as-grown films exhibit a metal–insulator transition at temperatures ranging from 200 to 230 K. Surprisingly, the transition temperature of postannealed films under O2 at 900 °C decreases by more than 100 K, featured with the colossal magnetoresistance. The O2 annealed films also show thermal hysteresis in resistivity and nonlinear I–V behavior. These results are interpreted in terms of Mn deficiency induced by large structural difference between film and substrate, and also discussed in viewpoint of a percolative phase transition. © 2001 American Institute of Physics.