A magnetic element that can be used in a memory array having high density includes a pinned layer, a half-metallic material layer, a spacer (or a barrier) layer and a free layer. The half-metallic material layer is formed on the pinned layer and preferably has a thickness that is less than about 100 .ANG.. The half-metallic material layer can be formed to be a continuous layer or a discontinuous on the pinned layer. The spacer (or barrier) layer is formed on the half-metallic material layer, such that the spacer (or barrier) layer is nonmagnetic and conductive (or insulating). The free layer is formed on the spacer (or barrier) layer and has a second magnetization that changes direction based on the spin-transfer effect when a write current passes through the magnetic element.