A magneto-optical recording medium has a recording layer whereon information is magneto-optically recorded. A readout layer is provided on the recording layer. The readout layer has a compensating temperature that is located between room temperature and the Curie temperature. In the readout layer, upon an application of a light beam, the in-plane magnetization occurs at room temperature and a transition from the in-plane magnetization to vertical magnetization occurs as the temperature of the irradiated area of the readout layer rises above a predetermined temperature. By employing this magneto-optical recording medium, with an application of a light beam that is intensity modulated into two levels, only a spot having a temperature not less than a predetermined temperature is involved in the reproduction; therefore, a recorded bit with a size smaller than the diameter of the light beam can be reproduced, thereby greatly increasing the recording density. Further, the level of the reproduced signals is increased, and crosstalk from the adjoining tracks is reduced; thus, information recording and overwriting can be conducted more easily.