A magnetic tunnel junction (MTJ) magnetoresistive read head for a magnetic recording system has the MTJ sensing or free ferromagnetic layer also functioning as a flux guide to direct magnetic flux from the magnetic recording medium to the tunnel junction. The MTJ fixed ferromagnetic layer has its front edge recessed from the sensing surface of the head. Both the fixed and free ferromagnetic layers are in contact with opposite surfaces of the MTJ tunnel barrier layer but the free ferromagnetic layer extends beyond the back edge of either the tunnel barrier layer or the fixed ferromagnetic layer, whichever back edge is closer to the sensing surface. This assures that the magnetic flux is non-zero in the tunnel junction region. The magnetization direction of the fixed ferromagnetic layer is fixed in a direction generally perpendicular to the sensing surface and thus to the magnetic recording medium, preferably by interfacial exchange coupling with an antiferromagnetic layer. The magnetization direction of the free ferromagnetic layer is aligned in a direction generally parallel to the surface of the medium in the absence of an applied magnetic field and is free to rotate in the presence of applied magnetic fields from the medium. A layer of high coercivity hard magnetic material adjacent the sides of the free ferromagnetic layer longitudinally biases the magnetization of the free ferromagnetic layer in the preferred direction.