Provided is an MR effect element in which the magnetization of the pinned layer is stably fixed even after going through high temperature process. The MR effect element comprises: a non-magnetic intermediate layer; a pinned layer and a free layer stacked so as to sandwich the non-magnetic intermediate layer; an antiferromagnetic layer stacked to have a surface contact with the pinned layer, for fixing a magnetization of the pinned layer to a direction in-plane of the pinned layer and perpendicular to a track width direction; and hard bias layers provided on both sides in the track width direction of the free layer, for applying a bias field to the free layer, a product .lamda..sub.S.times..sigma. of a saturation magnetostriction constant .lamda..sub.S of the pinned layer and an internal stress .sigma. on a cross-section perpendicular to a layer surface of the hard bias layer being negative.