We present a study of the effect of biaxial strain on the electrical and ma
gnetic properties of thin films of manganites. We observe that manganite fi
lms grown under biaxial compressive strain exhibit island growth morphology
which leads to a nonuniform distribution of the strain. Transport and magn
etic properties of these films suggest the coexistence of two different pha
ses, a metallic ferromagnet and an insulating antiferromagnet. We suggest t
hat the high strain regions are insulating while the low strain regions are
metallic. In such nonuniformly strained samples, we observe a large magnet
oresistance and a field-induced insulator-to-metal transition.