An exchange-coupled magnetic structure of a cobalt-ferrite layer adjacent a magnetic metal layer is used in magnetorestive sensors, such as spin valves or tunnel junction valves. The exchange-coupled magnetic structure is used in a pinning structure pinning the magnetization of a ferromagnetic pinned layer, or in an AP pinned layer. A low coercivity ferrite may be used in an AP free layer. Cobalt-ferrite layers may be formed by co-sputtering of Co and Fe in an oxygen/argon gas mixture, or by sputtering of a CoFe2 composition target in an oxygen/argon gas mixture. Alternatively, the cobalt-ferrite layer may be formed by evaporation of Co and Fe from an alloy source or separate sources along with a flux of oxygen atoms from a RF oxygen atom beam source. Magnetoresistive sensors including cobalt-ferrite layers have small read gaps and produce large signals with high efficiency.