In forming a top electrode for a magnetoresistive device, photoresist used in patterning the electrode is stripped using a non-reactive stripping process. Such a non-reactive stripping process uses water vapor or some other non-oxidizing gas that also passivates exposed portions the magnetoresistive device. In such magnetoresistive devices, a non-reactive spacer layer is included that helps prevent diffusion between layers in the magnetoresistive device, where the non-reactive nature of the spacer layer prevents sidewall roughness that can interfere with accurate formation of the lower portions of the magnetoresistive device.