Colossal magnetoresistance(1)-an unusually large change of resistivity observed in certain materials following application of magnetic field-has been extensively researched in ferromagnetic perovskite manganites, But it remains unclear why the magnetoresistive response increases dramatically when the Curie temperature (T-C) is reduced Ln these materials, Te varies sensitively with changing chemical pressure; this can be achieved by introducing trivalent rare-earth ions of differing size into the perovskite structure(2-4), without affecting the valency of the Mn ions. The chemical pressure modifies local structural parameters such as the Mn-O bond distance and Mn-O-Mn bond angle, which directly influence the case of electron hopping between hin ions (that is, the electronic bandwidth). But these effects cannot satisfactorily explain the dependence of magnetoresistance on Tc. Here we demonstrate, using electron microscopy data, that the prototypical (La,Pr,Ca)MnO3 system is electronically phase-separated into a sub-micrometre-scale mixture of insulating regions (with a particular type of charge-ordering) and metallic, ferromagnetic domains. We find that the colossal magnetoresistive effect in low-T-C systems can be explained by percolative transport through the ferromagnetic domains; this depends sensitively on the relative spin orientation of adjacent ferromagnetic domains which can be controlled by applied magnetic fields.