The magnetoresistance (MR) effect is a phenomenon whereby application of a magnetic field changes the electrical resistance of a ferromagnetic material. Magnetic thin-film devices using the MR effect, such as magnetic field sensors, have been widely studied in recent years, and rapid progress is being made in this field. MR films will therefore be used in functional thin-film devices such as mutipliers and modulators. In this paper, we introduce a new MR thin-film device with a modulation function, and report on the principle of the device’s modulation function and on the results of computer simulation.