Epitaxial discontinuous Fe/MgO multilayers have been grown by pulsed laser deposition on MgO͑001͒ single-crystal substrates. The multilayers with 0.6 nm nominal Fe layers thickness are superparamagnetic and demonstrate tunneling magnetoresistance ͑TMR͒ in the current-in-plane configuration. Increasing deposition temperature causes an improvement in crystal quality and is accompanied by higher TMR ratios. The maximum value ͑9.2% TMR at room temperature and 18 kOe magnetic field͒ trebles that of polycrystalline samples deposited simultaneously on glass substrates. A model formula for TMR ratio that includes both spin-dependent tunneling and spin-filtering effect is proposed to explain these results. © 2011 American Institute of Physics. ͓doi:10.1063/1.3569149͔ Discontinuous metal-insulator multilayers ͑DMIMs͒ are cermet structures prepared by repeated alternate deposition of a continuous insulating and a discontinuous metal layer composed of nanometer-sized islands. The size and shape of the nanoparticles can be controlled by the nominal thickness of the metallic layer ͑typically of the order of 1 nm͒ and deposition parameters. Ferromagnetic metal-based DMIMs show moderate room-temperature ͑RT͒ tunneling magnetoresistance ͑TMR͒ that originates from spin-dependent tunneling between adjacent metallic granules. 1-5 Significant lowfield sensitivity in the current-in-plane ͑CIP͒ configuration and relative ease of preparation make DMIMs promising materials for sensors and read heads. 3 Although DMIMs were actively studied during the past decade, only structures with amorphous insulator layers have been prepared so far by different groups ͑see for instance Ref. 5 and references therein͒. No studies on the influence of the substrate nature, deposition temperature, and degree of crystallinity of the insulator layer on transport properties of DMIMs have been reported previously.In planar magnetic tunnel junctions ͑MTJs͒ a substantial increase in TMR ratios appeared when single-crystal MgO replaced amorphous alumina tunnel barriers. 6 This is due to the crucial role of the electron band symmetry of the electrodes and the barrier in epitaxial Fe/MgO/Fe MTJs. 6,7 Recently, [8][9][10] we studied Fe/MgO DMIMs deposited on glass substrates by pulsed laser deposition ͑PLD͒. In these materials the TMR ratio is defined as TMR= 100ϫ ͓R͑H͒ − R͑H =0͔͒ / R͑H =0͒, R being the electrical resistance and H the magnetic field. For Fe layers with 0.61 nm nominal thickness, TMR ratiosϷ −3% at RT were achieved in 18 kOe magnetic field. In this case, the MgO spacers grew in polycrystalline state with a tendency to form large columnar grains through the Fe layers. This suggests that increasing the degree of texturing of Fe/MgO DMIMs could lead to an enhancement of TMR.In this letter, we report on the preparation, structural characterization, and CIP TMR of epitaxial Fe/MgO DMIMs deposited by PLD on single-crystal MgO͑001͒ substrates. The effect of elevated substrate temperature during deposition ͑T S ͒ on the microstructure and transport properti...