Current-perpendicular-to-plane (CPP) spin valve (SV) films with nano-oxide layers have been developed. The enhancement of giant magnetoresistance by inserting the current confining layer between free and pinned layers was confirmed by the calculation of the current-flow distribution using a finite-element model. For the bottom-type spin valve films with the structure of PdPtMn/CoFeB/Ru/CoFeB/Cu/oxidized CoFeB(t nm)/Cu/CoFeB, MR ratio of 5.0% and RA of 0.6 Ω·μm2 were obtained at t=1.2 nm. The merged head using the CPP-SV film with a nano-oxide layer whose MR ratio was 3.2% was fabricated. The magnetic read core width was 130 nm when the physical free-layer width was 100 nm. 0.91 mVp-p output voltage was obtained at the sense current of 4.8 mA which corresponds to the average current density of 19 MA/cm2.