According to one embodiment, a method of manufacturing a magnetoresistive element includes a layered structure and a pair of electrodes, the layered structure including a cap layer, a magnetization pinned layer, a magnetization free layer, a spacer layer and a functional layer provided in the magnetization pinned layer, between the magnetization pinned layer and the spacer layer, between the spacer layer and the magnetization free layer, in the magnetization free layer, or between the magnetization free layer and the cap layer and including an oxide, the method including forming a film including a base material of the functional layer, performing an oxidation treatment on the film using a gas containing oxygen in a form of at least one selected from the group consisting of molecule, ion, plasma and radical, and performing a reduction treatment using a reducing gas on the film after the oxidation treatment.