Various failure modes of Permalloy magnetoresistors are evaluated. Magnetic failure of magnetoresistors can be eliminated by passivation with evaporated SiO and sputtered Al2O3and Si3N4films. Effect of the permalloy/Au interaction at the sensor/lead metallization interface was investigated by high current and temperature stressing (5.5 × 106A/cm2and 330°C) of actual sensors, and by He-ion nuclear backscattering and x-ray diffraction analysis of Au/permalloy sheet film couples. Stripe cracking failures occur at the negative terminal. Significant interdiffusion of Au/permalloy can occur. However, the interdiffusion is not particularly deleterious to sensor performance.