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CoFe–MgO–CoFe magnetic tunnel junctions (MTJs) were fabricated by means of ion beam sputtering of MgO as well as subsequent thin films on CoFe. We demonstrated that when a submonolayer of Mg was deposited on the CoFe layer prior to the deposition of MgO, profound improvement in the performance of the CoFe–Mg–MgO–CoFe MTJ was achieved compared to that without the Mg layer. ac impedance measurement indicated that the interfacial Mg layer resulted in fivefold increase in the magnetoresistance ratio from 0.76% for MTJs without it to 4% for that with it. Complex-capacitance (CC) spectra of MTJs showed that the contribution in the relaxation frequency by textured MgO increased. This indicated that the submonolayer Mg improved the texture of the subsequently deposited MgO. Bias-dependent complex-impedance (CI) spectra reveal that interfacial defects were also suppressed due to the submonolayer of Mg. Results obtained from x-ray reflectivity and transmission electronic microscopy were also consistent with those of CI and CC.