A simple way to avoid the oxidation layer on the surface of Permalloy by improving the fabrication process was investigated. Electron-beam lithography (EBL) was used to define patterns with a very high resolution positive tone resist, ZEP 520A-7 for high dry-etch resistance, on a prepatterned silicon substrate including contact pads. Reactive ion etching (RIE) was carried out at 50 mTorr vacuum with a 100 W rf power and 50 SCCM of CH4 gas flow rate for 100s. A Piranha etch is required to remove the residual resist because the degenerated resist is not easy to remove with a solvent after the RIE process. A 4:1 mixture of sulfuric acid (H2SO4) and hydrogen peroxide (H2O2) was prepared at 110 °C. With an optimal alignment on the predefined grooves, the gold electrodes could be selectively deposited by the liftoff process with a controlled height or width. The results show that embedded structure of the electrodes minimizes the perturbation to the magnetic metallic channel with a good electrical contact.