This work focuses on magnetic tunnel junctions with a polycrystalline MgO barrier, prepared by plasma oxidation. Combined with Co50Fe50 ferromagnetic electrodes, a large tunnel magnetoresistance (TMR) of 60% is obtained at room temperature. The TMR effect is comparable to state-of-the-art Al oxide barriers with amorphous CoFeB electrodes. It is also found to decrease with the MgO thickness. Two most significant advantages of the MgO junctions are pointed out: (a) The resistance-area product is approximately two orders of magnitude lower than for AlOX- based junctions of the same thickness. (b) MgO presents unsurpassed thermal stability for high annealing temperatures (up to 370 °C) and long annealing periods. In addition, for small, patterned elements, we have tested the switching behavior of the soft electrode grown on the polycrystalline MgO barrier.