There is a strong need for advanced pattern transfer methods for magnetic devices such as magnetic random access memories, sensors for avionics and mine detection, and read/write heads for high density information storage. As the critical dimensions in these devices are decreased, the use of ion milling for pattern transfer presents major obstacles, including sidewall redeposition (which degrades magnetic performance) and poor mask selectivity. Most magnetic materials do not form volatile etch products in conventional reactive ion etching. We have recently found that high density plasmas provide efficient ion-assisted desorption of metal chloride etch products, provided that the etch production formation and removal are balanced by correct choice of ion/neutral ratio. We have completed the survey of plasma chemistries for etching of giant magnetoresistance (GMR) (NiFe, NiMnSb) and collossal magnetoresistance (CMR) (LaCaMnO3,LaSrMnO3,PrBaCaMnO3) materials. The optimum choices are Cl-2/Ar for CMR oxides, SF6/Ar for NiMnSb Heusler alloys and either Cl-2/Ar or CO/NH3 for GMR multilayers. We have also addressed the issue of postetch cleaning for corrosion prevention, by combining simple water rinsing with in situ plasma cleans involving H-2, O-2, or F-2. Under optimized conditions, there is excellent long-term stability of both the mechanical and magnetic properties of the multilayer structures.