A thermoelectrically cooled GMR sensor having a first thermoelectric layer with an array of nanowires, wherein the nanowires include a diameter of about 1 nanometer to about 1000 nanometers. A plurality of alternating layers of magnetic and nonmagnetic material are positioned over and extend the nanowires to form a GMR assembly. A second thermoelectric layer is positioned over the GMR assembly and extends the nanowires, such that the nanowires have a length of between about 100 nanometers and about 500 microns. Conductors are placed in contact with the first and second thermoelectric layers for connecting the thermoelectric layers to a voltage source.