Magnetic and magnetotransport properties have been studied in nanocomposites (EuS)-Co and (EuS)-Ag prepared by mechanical alloying. For (EuS)/sub 70/Co/sub 30/, the large negative magnetoresistance (/spl sim/50%) found at 20 K, just above the Curie temperature (T/sub c/) of EuS, arises from the suppression of spin fluctuation in EuS. Below T/sub c/, the positive magnetoresistance (/spl sim/15%), which is uncharacteristic of ferromagnetic semiconductors, is probably due to defect-induced magnetic fluctuation. On the other hand, (EuS)/sub 70/Ag/sub 30/, where nonmagnetic silver replaces cobalt, exhibits negative magnetoresistance below T/sub c/, which is possibly related to the spin dependent scattering commonly seen in GMR materials. While (EuS)/sub 70/Co/sub 30/ shows semiconducting conductivity, (EuS)/sub 70/Ag/sub 30/ is metallic. Reentrant spin glass behavior has been observed in EuS-Ag system, where the rise of antiferromagnetic coupling is due to the defects and disorder caused by mechanical milling.