A longitudinal bias layer and an electrode layer are formed on a non-magnetic material layer. The longitudinal bias layer and the electrode layer are partially removed by an etching technique so that a narrow gap defining the track width Tw is formed in the longitudinal bias layer and the electrode layer. Furthermore, a three-layer film consisting of, from bottom to top, a magnetoresistance effect layer, a non-magnetic layer, and a transverse bias layer, or otherwise a spin valve film consisting of a free magnetic layer, a non-magnetic layer, a fixed magnetic layer and a bias layer is formed on the above structure. The three-layer film or the spin valve film is then partially removed by an etching technique so that the three-layer film or the spin valve film remains only in the above-described narrow gap formed in the longitudinal bias layer and the electrode layer. The shape of the side walls of the three-layer film or the spin valve film is precisely determined by the side walls of the longitudinal bias layer and the electrode layer. The resultant three-layer film or the spin valve film exhibits excellent magnetic detection characteristics. Furthermore, the longitudinal bias layer has good magnetic coupling with the magnetoresistance effect layer.