The thickness-dependent magnetic and electrical transport properties of nearly strain-free La0.7Sr0.3CoO3 (LSCO) films grown on (001)-oriented (LaAlO3)0.3 (Sr2AlTaO6)0.7 substrates were systematically studied. A crossover from ferromagnetic/metallic to non-magnetic/insulating behavior occurs at a critical thickness (∼8 nm) that is significantly smaller than LSCO films under larger strains in reported literature. X-ray absorption measurements revealed that the difference of functional properties at reduced film thicknesses was accompanied by changes in the valence state of Co ions at the film/substrate interface.