A disk drive is disclosed having a disk, and a head actuated over the disk, the head comprising a magnetoresistive (MR) element. Control circuitry within the disk drive sets an operating bias current for the MR element by computing a target voltage for the MR element, applying a bias current to the MR element, measuring a voltage across the MR element corresponding to the bias current, and adjusting the bias current applied to the MR element until the measured voltage substantially equals the target voltage.