The anisotropic magnetoresistance (AMR) and magnetic properties of NiFe films can be remarkably enhanced via CoFeB encapsulation. In the case of an ultrathin NiFe film having a Ta/CoFeB/MgO/NiFe/MgO/CoFeB/Ta structure, the CoFeB/MgO layers suppressed the formation of magnetic dead layers and the interdiffusions and interface reactions between the NiFe and Ta layers. The AMR reached a maximum value of 3.56% at 450 °C. More importantly, a single NiFe(111) peak can be formed resulting in higher AMR values for films having CoFeB encapsulation. This enhanced AMR also originated from the significant specular reflection of electrons owing to the crystalline MgO layer, together with the sharp interfaces with the NiFe layer. These factors together resulted in higher AMR and improved magnetic properties.