Auxetic-like strain states were generated in self-assembled nanocomposite thin films of (Ba0.6Sr0.4TiO3)1−x − (Sm2O3)x(BSTO − SmO). A switch from auxetic-like to elastic-like strain behavior was observed for x > 0.50, when the SmO switched from being nanopillars in the BSTO matrix to being the matrix with BSTO nanopillars embedded in it. A simple model was adopted to explain how in-plane strain varies with x. At high x (0.75), strongly enhanced ferroelectric properties were obtained compared to pure BSTO films. The nanocomposite method represents a powerful new way to tune the properties of a wide range of strongly correlated metal oxides whose properties are very sensitive to strain.