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We report significant enhancement of magnetoresistance (MR) in melt-processed La[sub 0.67]Ca[sub 0.33]MnO[sub 3] (LCM) and in Ho-doped LCM samples. The LCM system exhibits surprising enhancement of metal-insulator transition (T[sub IM]) that coincides with the Curie transition temperature (T[sub c]), T[sub IM]approx. T[sub c], illustrating the enhanced percolative transport and spin-polarization through grain boundaries. Surprisingly, 1 mol % of addition of Ho enhances T[sub c] of ∼70 K with remarkable colossal MR. The nanoscale Ho distribution is consistent with the magnetic inhomogeneity-induced MR due to phase segregation in Ho-doped sample whereas charge-segregation picture is valid for undoped LCM. © 2001 American Institute of Physics. [ABSTRACT FROM AUTHOR]