A novel method is introduced for oxidizing thin metal films with nanometer-scale resolution. Simply by subjecting Ti and Nb films to local current densities of 10(7) A/cm(2), metal-oxide tunneling barriers of 10-50 nm width can be fabricated in a self-limiting fashion. The high spatial resolution of the process results from its strongly nonlinear dependence on the current density. Our experiments suggest that the oxidation involves current-induced atomic rearrangements and local heating. At the final stages of the barrier formation, when only atomic-scale channels remain unoxidized, the oxidation rate decreases drastically while the conductance drops in steps of about 2 e(2)/h. This behavior gives evidence of ballistic transport and of the superior stability of such metallic nanowires against current-induced forces compared with that of the bull; metal. Finally, we show that current-induced local oxidation is a valuable process for the fabrication of novel nanoelectronic devices. As an example, we prepared a single electron transistor that exhibits a Coulomb staircase at room temperature.