A MTJ that minimizes error count (EC) while achieving high MR value, low magnetostriction, and a RA of about 1100 .OMEGA.-.mu.m.sup.2 for 1 Mbit MRAM devices is disclosed. The MTJ has a composite AP1 pinned layer made of a lower amorphous Co.sub.60Fe.sub.20B.sub.20 layer and an upper crystalline Co.sub.75Fe.sub.25 layer to promote a smoother and more uniform AlOx tunnel barrier. A "stronger oxidation" state is realized in the AlOx layer by depositing a thicker than normal Al layer or extending the ROX cycle time for Al oxidation and thereby reduces tunneling hot spots. The NiFe free layer has a low Fe content of about 8 to 21 atomic % and the Hf content in the NiFeHf capping layer is from 10 to 25 atomic %. A Ta hard mask is formed on the capping layer. EC (best) is reduced from >100 ppm to <10 ppm by using the preferred MTJ configuration.