Thermally induced magnetic noise in giant magnetoresistive (GMR) read heads was characterized with both contiguous junction and lead overlaid design using an integrated spectral method. At 0.25 μm magnetic read width and 4 mA bias current, magnetic noise is twice as large as Johnson noise for lead overlaid design, while it is comparable with Johnson noise for contiguous junction design. The head signal-to-noise ratio gain of 2–3 dB with lead overlaid design is less than an amplitude gain of 50%–100% since it is limited by increased magnetic noise, which roughly scales with amplitude. Magnetic noise increases with bias current at a much faster rate than Johnson noise. Higher magnetic noise is attributed to weaker longitudinal bias field associated with the lead overlaid design. Fortunately, magnetic noise does not limit system level signal to noise ratio since media transition noise is dominant. However, it is projected that magnetic noise will account for an increased portion of total noise power at higher areal densities.