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We have used Raman scattering to explore finite size effects in the phase transition of 300 Å colloidal microcrystallites of CdS. By measuring the shifts in LO phonon frequencies as a function of pressure we conclude that these small microcrystallites undergo a well-defined first order phase transition similar to the one occurring in bulk CdS. However, the phase transformation in the colloids exhibits a smaller hysteresis, which we attribute to efficient annealing of defects in the high surface area colloidal material. [ABSTRACT FROM AUTHOR]