We report the observation of B-o decays the K(+)pi(-)pi(o) final state using a data sample of 78 fb(-1) collected by the Belle detector at the kekb e(+)e(-) collider. With no assumptions about intermediate states in the decay, the branching fraction is measured to be (36.6 (+4.2) (-4.3) +/- 3.0) X 10(-6). We also search for B decays to intermediate two-body states the same K(+)pi(-)pi(o) final state. Significant B signals are observed in the P(770)(-) K+ and K-* (892)(+) pi(-) channels, with branching fractions of (15.1 (+3.4+1.4+2.0)(-3.3-1.5-2.1)) X10(-)6 and (14.8 (+4.6+1.5+2.4)(-4.4-1.0-0.9)) X 10(-6), respectively. The first error is statistical, the second is systematic and the third is due to the largest possible interference. Contributions from other possible two-body states will be discussed. No C P asymmetry is found in the inclusive K+ pi(-)pi(o) or p(-)K(+) modes, and we set 90% confidence level bounds on the asymmetry of -0.12 < A(CP) < 0.26 and -0.18 < A(CP) < 0.64, respectively. (C) 2004 Elsevier B.V. All rights reserved.