A method of forming a thin insulating layer in an MRAM device makes it possible to effectively prevent the insulating layer from being locally thinned, creating a short circuit or other defect. The method includes forming lower patterns for the MRAM device on a semiconductor substrate. An insulating layer for covering the lower patterns is formed. Portions of the insulating layer which are substantially thicker relative to other portions of the insulating layer are selectively dry etched using a photoresist mask. The insulating layer is planarized a chemical mechanical polishing (CMP) process so that the insulating layer remains at a thickness larger than a target thickness. The surface of the planarized insulating layer is plasma dry etched or wet etched such that the insulating layer is reduced to the target thickness.