A high performance TMR element is fabricated by inserting an oxygen surfactant layer (OSL) between a pinned layer and AlOx tunnel barrier layer in a bottom spin valve configuration. The pinned layer preferably has a SyAP configuration with an outer pinned layer, a Ru coupling layer, and an inner pinned layer comprised of CoFeXBY/CoFeZ wherein x=0 to 70 atomic %, y=0 to 30 atomic %, and z=0 to 100 atomic %. The OSL is formed by treating the CoFez layer with oxygen plasma. The AlOx tunnel barrier has improved uniformity of about 2% across a 6 inch wafer and can be formed from an Al layer as thin as 5 Angstroms. As a result, the Hin value can be decreased by ⅓ to about 32 Oe. A dR/R of 25% and a RA of 3 ohm-cm2 have been achieved for TMR read head applications.