We have developed a magnetic tunnel junction (MTJ) pattern technique that involves transforming the magnetic layer above the tunnel barrier in unwanted areas into an insulator, thus providing insulation between different MTJ devices without suffering common tunnel barrier shorting problems. With this technique, 90%-100% yielding MTJ devices have been observed. MTJ results using this process are superior to an etching based process. Switching distribution of patterned magnetic bits is also narrower using this novel technique. Process control and the ability to stop on the tunnel barrier have been demonstrated. (C) 2003 American Institute of Physics.