Granular CrO2/polystyrene composites were prepared by evaporating polystyrene solution. The composites consisting of the acicular half-metallic CrO2 particles encapsulated properly with a thin layer of insulating polymer can exhibit a large enhancement in room temperature magnetoresistance (MR), up to -8.2% at a low field of 6.5 kOe. The microstructures and thermal behaviors of the composite are analyzed by XRD, SEM, TGA and DSC. The temperature dependence of the electrical resistance is studied at the temperature range (77-298 K). We also argue that the influence of polymer on room temperature MR is more significant than that at low temperature, which may be mainly attributed to spin-dependent tunneling between particles. (C) 2003 Elsevier Science B.V. All rights reserved.