Abstract: A method for controlling magnetostriction in a free layer of a magnetoresistive sensor. A pinned layer structure is deposited and then a spacer layer, preferably Cu is deposited. Oxygen is introduced into the spacer layer. The oxygen can be introduced either during the deposition of the spacer layer or after the spacer layer has been deposited. A free layer structure is then deposited over the spacer layer. A capping layer such as Ta can be deposited over the free layer structure. The sensor is annealed to set the magnetization of the pinned layer. In the process of annealing the sensor the oxygen migrates out of the spacer. After annealing, no significant amount of oxygen is present in either the spacer layer or the free layer structure, and only trace amounts of oxygen are present in the Ta capping layer.