We show a negative magnetoresistance (MR) in GaAs with magnetic MnAs nanoclusters (about 1.5% at 30 K in 1 T). The clusters were formed in a two step process consisting of the molecular beam epitaxy of (Ga,Mn)As layer and the subsequent annealing. The origin of the negative MR is attributed to the presence of the MnAs clusters. The mechanism is considered to be a spin-dependent scattering of carriers by MnAs clusters which decreases when the direction of the magnetization between the clusters aligns with the magnetic field. (C) 1998 American Institute of Physics. [S0003-6951(98)02125-1].