A spin-valve thin-film magnetic element includes a laminate including a free
magnetic
layer and a pinned magnetic layer. A pair of hard bias layers is provided on both
sides of the laminate to orient the magnetic moment of the free magnetic layer
in one direction. A pair of insulating layers extend over the hard bias layers
and both top ends of the laminate in the track width direction. A pair of lead
layers is provided on the insulating layers. Each lead layer has an overlay section
extending over the insulating layer and the laminate. The edge of the overlay section
is in direct contact with the central portion of the laminate.