Abstract: A magnetoresistive (MR) read transducer and method of fabricating same. A soft magnetic layer and an MR layer extend over a central active region and passive end regions of the transducer. A nonmagnetic spacer layer separates the soft magnetic film layer and MR layer and extends over the central active region and at least part of both passive end regions. An antiferromagnetic layer directly contacts the MR layer only in the end regions and produces an exchange bias field between the antiferromagnetic layer and the MR layer that is oriented at a preselected acute angle to the longitudinal direction of the transducer. This results in the MR layer being oriented at the preselected acute angle and the soft magnetic film layer in the passive end regions being transversely oriented by magnetostatic coupling to the MR layer. To fabricate the transducer, the antiferromagnetic layer is annealed in an external field above the Neel temperature to produce the canted exchange bias field.