A magnetoresistive sensor having two free layers with shape anisotropy induced magnetic alignment is disclosed. The magnetoresistive sensor includes a first ferromagnetic free layer having a first quiescent state magnetization direction. The magnetoresistive sensor also includes a second elongated free layer having a second quiescent state magnetization direction and positioned such that the first quiescent state magnetization direction is generally orthogonal to the second quiescent state magnetization direction. Further, a portion of the second ferromagnetic free layer overlaps a portion of the first ferromagnetic free layer proximal to an air bearing surface to form a v-shape. A nonmagnetic spacer layer is also positioned between the first ferromagnetic free layer and the second ferromagnetic free layer.