We have studied the microstructure and the magnetoresistivity of polycrystalline YBa 2Cu 3O y (YBCO or Y-123 for brevity) embedded with nanoparticles of Y-deficient YBCO, generated by the planetary ball milling technique. Bulk samples were synthesized from a precursor YBCO powder, which was prepared from commercial high purity Y 2O 3, Ba 2CO 3 and CuO via a one-step annealing process in air at 950 °C. After planetary ball milling of the precursor, the powder was uniaxially pressed and subsequently annealed at 950 °C in air. Phase analysis by X-ray diffraction (XRD), granular structure examination by scanning electron microscopy (SEM), microstructure investigation by transmission electron microscopy (TEM) coupled with energy dispersive X-ray spectroscopy (EDXS) were carried out. TEM analyses show that nanoparticles of Y-deficient YBCO, generated by ball milling, are embedded in the superconducting matrix. Electrical resistance as a function of temperature, ρ( T), revealed that the zero resistance temperature, T co , is 84.5 and 90 K for the milled and unmilled samples respectively. The milled ceramics exhibit a large magnetoresistance in weak magnetic fields at liquid nitrogen temperature. This attractive effect is of high significance as it makes these materials promising candidates for practical application in magnetic field sensor devices.