Ferromagnetic transitions, the magnetocaloric effect, and the atomic-scale microstructure in an annealed bulk material of LaFe 11.5 Si 1.5 were investigated using magnetic measurements, Mossbauer spectroscopy, high-resolution X-ray diffraction analysis, and high-resolution transmission electron microscopy. The results provide evidence of the coexistence of two ferromagnetic phases with different Curie temperatures. The phase with a Curie temperature of 216 K corresponds to a Sirich phase of a NaZn 13 -type structure with a small lattice volume, whereas the phase with a Curie temperature of 185 K corresponds to a Si-poor phase of a NaZn 13 -type structure with a large lattice volume. This phase coexistence is observed on a nanometer scale and it can account for inverse thermal hysteresis of the ferromagnetic transition in the Si-rich phase during warming. Furthermore, the phase coexistence helps the bulk material achieve a refrigeration capacity of 170 J kg −1 due to a combination of the magnetocaloric effect in each phase. It is determined that the magnetocaloric effect in the Si-rich and the Si-poor phase brings about a maximum of the total entropy change of −3.55 and −6.80 and J kg −1 K −1 at respective Curie temperatures, respectively. Fundamentally, the phase coexistence indicates coloring of Si atoms in the lattice of a NaZn 13 -type structure and can be attributed to nanoscale phase separation of a disordered precursor during annealing of the bulk material. The nanoscale phase separation may occur in other magnetocaloric materials, thus allowing for improvement of their refrigeration capacity.