This article reviews progress in magnetoresistive (MR) read sensor technology for hard-disk drives (HDDs). MR reader technology has progressed from the anisotropic magnetoresistance sensor, to the current-in-plane giant magnetoresistive (CIP-GMR) sensor, to today’s current-perpendicular-to-plane (CPP) tunneling magnetoresistance (TMR) sensor. This evolution has driven the continuous growth of the areal density of HDDs from 2 Gbpsi (gigabits/in2) in early longitudinal recording to ∼1 Tbpsi (terabits/in2) currently in perpendicular magnetic recording. For further increases in the areal density, a transition to energy-assisted recording is expected in the near future. Further technical challenges for the read sensor technology toward 2 Tbpsi and then 5 Tbpsi areal densities are discussed based on recent promising experimental work on CPP-GMR using Heusler alloys, and CPP-GMR’s laterally expanded version, the lateral spin valve (LSV). To realize large MR output and narrow shield-to-shield spacing requirements for higher density recording, materials selection and optimization of interface structures of CPP-GMR and LSV devices are critical.