It is generally accepted that electronic and magnetic phase separation is the origin of many of exotic properties of strongly correlated electron materials, such as colossal magnetoresistance (CMR), an unusually large variation in the electrical resistivity under applied magnetic field. In the simplest picture, the two competing phases are those associated with the material state on either side of the phase transition. Those phases would be paramagnetic insulator and ferromagnetic metal for the CMR effect in doped manganites. It has been speculated that a critical component of the CMR phenomenon is nanoclusters with quite different properties than either of the terminal phases during the transition. However, the role of these nanoclusters in the CMR effect remains elusive because the physical properties of the nanoclusters are hard to measure when embedded in bulk materials. Here we show the unexpected behavior of the nanoclusters in the CMR compound La(1-x)Ca(x)MnO(3) (0.4 ≤ x < 0.5) by directly correlating transmission electron microscopy observations with bulk measurements. The structurally modified nanoclusters at the CMR temperature were found to be ferromagnetic and exhibit much higher electrical conductivity than previously proposed. Only at temperatures much below the CMR transition, the nanoclusters are antiferromagnetic and insulating. These findings substantially alter the current understanding of these nanoclusters on the material's functionality and would shed light on the microscopic study on the competing spin-lattice-charge orders in strongly correlated systems.