A magnetoresistive read head includes a spin valve having a multi-layer in-stack bias and side shields to substantially reduce the undesired flux from adjacent bits and tracks, as well as from the transverse field of the recording medium itself. At least one free layer is spaced apart from at least one pinned layer by a spacer. Above the free layer, a capping layer is provided, followed by the in-stack bias, which includes a non-magnetic conductive layer, a ferromagnetic layer having a magnetization fixed by an anti-ferromagnetic layer, and a stabilizing ferromagnetic layer. Additionally, a multilayered side shield is provided, including a thin insulator, a soft buffer layer and a soft side shield layer. As a result, the free layer is shielded from the undesired flux, and recording media having substantially smaller track size and bit size.