Techniques for preventing switching of spins in a magnetic tunnel junction by stray magnetic fields using a thin film magnetic shield are provided. In one aspect, a method of forming a magnetic tunnel junction includes: forming a stack on a substrate, having a first magnetic layer, a tunnel barrier, and a second magnetic layer; etching the stack to partially pattern the magnetic tunnel junction in the stack, wherein the etching includes patterning the magnetic tunnel junction through the second magnetic layer, the tunnel barrier, and partway through the first magnetic layer; depositing a first spacer and a magnetic shield film onto the partially patterned magnetic tunnel junction; etching back the magnetic shield film and first spacer; complete etching of the magnetic tunnel junction through the first magnetic layer to form a fully patterned magnetic tunnel junction; and depositing a second spacer onto the fully patterned magnetic tunnel junction.