We have studied the oxygen doping effect in thin Nd1.85Ce0.15CuO4−y(NCCO) films. Contrary to the common believe that the disappearance of superconductivity in the over‐reduced NCCO samples is a consequence of phase decomposition, we found that there exists an over‐reduced region in which the crystallographic structure of the film remains essentially the same as in the optimum‐oxygen doped region, but the film becomes insulating. Rutherford backscattering spectroscopy channeling analysis reveals that the oxygen over‐reduction increases atomic distortion in the lattice. This work provides strong support to previous transport studies by Jiangetal. [Phys. Rev. Lett.73, 1291 (1994)], which suggested the existence of both electron and hole carriers in superconducting NCCO. ©1995 American Institute of Physics.