Here we present a combined study of the slightly underdoped novel pnictide superconductor Ba1-xKxFe2As2 by means of x-ray powder diffraction, neutron scattering, muon-spin rotation (microSR), and magnetic force microscopy (MFM). Static antiferromagnetic order sets in below T{m} approximately 70 K as inferred from the neutron scattering and zero-field-microSR data. Transverse-field microSR below Tc shows a coexistence of magnetically ordered and nonmagnetic states, which is also confirmed by MFM imaging. We explain such coexistence by electronic phase separation into antiferromagnetic and superconducting- or normal-state regions on a lateral scale of several tens of nanometers. Our findings indicate that such mesoscopic phase separation can be considered an intrinsic property of some iron pnictide superconductors.