There is an emerging interest in the CPP (current perpendicular to the plane of layers) geometry for transport measurements1 and we report on new developments on the CPP-MR (magnetoresistance). Specifically we show that the effect of spin-dependent potentials in magnetic multilayers is far more pronounced for CPP-MR than for CIP-MR (current in the plane of layers). This adds to the difference between CIP-MR and CPP-MR that is due to the spin-dependent scattering in the multilayers.2 The potentials seen by the spin up and the spin down conduction electrons are different, and they depend on the orientation of the magnetic layers relative to one another, i.e., they are different for ferro and antiferromagnetically aligned layers. We have determined the Bloch functions appropriate to these spin-dependent potentials,3 and have used the Kubo formalism to calculate the resistivity and magnetoresistance for both CIP and CPP geometries. In general these potentials do affect the CIP-MR; however, for uniform scattering, we find no effect of the potentials on the CIP-MR. On the contrary, these potentials affect the CPP-MR in all circumstances, even for uniform scattering of the conduction electrons. Due to spatial and spin inhomogeneities in magnetic multilayers, the current varies from one layer to another for a uniform electric field parallel to the layers, CIP. However, for current perpendicular to the plane of the layers, CPP, it is the electric field that varies from one layer to another. We describe the distributions in both cases, and we compare our results on the CPP-MR with recent data on Co/Ag and Co/Cu.4