Spin-dependent tunneling (SDT) materials with bottom-pinned structure (substrate/Ta/NiFeCr/PtMn/CoFe/t Al2O3/CoFe/NiFe/Ta) are fabricated by magnetron sputtering in ultrahigh vacuum. In this study, a two-step natural oxidation was used, in which the second Al layer was deposited and naturally oxidized after the natural oxidation of the first Al layer. The top and bottom leads were also patterned into bow-tie shaped structures. The two-step oxidation process results in a perfectly decoupled pinned and free layer in a film with a total as-deposited aluminum thickness of 7 Å, whereas, the one-step oxidation process gives rise to strongly coupled magnetic layers in a film with this thickness of aluminum. By using this two-step natural oxidation technique, an optimum tunneling magnetic resistance (TMR) ratio of 29.3% and resistance×area (RA) product of 34 Ω μm2 were achieved in junctions with 8 Å barrier (5+3 Å). In conclusion, a two-step oxidation process was used to fabricate spin-dependent tunneling devices with low RA product and high TMR ratio for head applications. © 2002 American Institute of Physics.