An MR sensor having improved current density distribution, reduced overall resistance and a substantially planar surface is disclosed. The MR sensor includes an MR layer having first and second outer regions and an active region located between the first and second outer regions. A first permanent magnet region is formed upon the first MR layer outer region and defines a first boundary of the MR layer active region. A second permanent magnet region is formed upon the second MR layer outer region and defines a second boundary of the MR layer active region so that a gap region is positioned at least partially between the first and second permanent magnet regions. A spacer layer is formed on the MR layer active region between the first and second permanent magnet regions. A soft adjacent layer is formed in the active region and upon the spacer layer, and, in some preferred embodiments, also at least partially upon the permanent magnet region.