The effects of gas-cluster ion beam (GCIB) processing accelerated by a few thousands of volts on the surface roughness, crystalline orientation texture, magnetic, and giant magnetoresistance (GMR) properties of exchange biased α-Fe 2O 3 bottom spin-valves have been investigated. It was found that all of these properties were strongly influenced by the GCIB processing conditions, such as gas sources including Ar, H 2, O 2, and their mixture combinations, and ion cluster doses. The properties of both GCIB processed and unprocessed areas on 50 and 100-nm thick α-Fe 2O 3 coated Si(1 0 0) wafers with GMR multi-layers of Co(3)/Cu(2.5)/Co(3)/Ta 2O 5(2.5 nm) were compared. The GMR ratio, Δ R/ R 0, was consistently increased by up to 20–30% for the areas that were GCIB processed with condition “P1(10 14 Ar gas)+P4(5×10 14 Ar+H 2 gases) ion cluster ions/cm 2” (Δ R/ R 0=14%) over the unprocessed α-Fe 2O 3 layer (Δ R/ R 0=11.2%), and decreased by up to 80% when using the process with the heaviest ion does, “P3” (Δ R/ R 0=2.4%). In addition, GCIB processing changed the magnetic properties of GMR spin-valve including exchange bias field, pinned, and free-layer coercivities significantly. The free-layer coercivity was decreased dramatically with “P1+P4” GCIB processing from 160 Oe to as low as 27 Oe and the exchange bias field increased from 72 Oe up to ∼125 Oe. The decrease of the GMR ratio, pinned coercivity, and exchange bias field when the “P3” condition process was used are thought to be due to surface damage and composition changes of the α-Fe 2O 3 anti-ferromagnetic layer. X-ray photoelectron spectroscopy (XPS) analysis of the α-Fe 2O 3 thin film surface showed a 4.6% reduction of the oxygen content (unprocessed: 65 kcps (kilo-counter per second), “P3”: 62 kcps) after application of the P3, the heaviest process condition. Atomic force microscopy (AFM), X-ray diffraction (XRD), and cross-sectional transmission electron microscopy (XTEM) analyses suggest that the increase of the GMR ratio and the improved magnetic properties of optimized GCIB-processed α-Fe 2O 3 spin-valve are due to the reduction of surface roughness and improvement of the crystalline orientation texture resulting from a more “defect-free” or denser α-Fe 2O 3 layer.