The Giant Magnetoresistance effect with high field-sensitivity was recently discovered in multilayers of alternating ferromagnetic and non-ferromagnetic layers. Some of these layer structures may find industrial application in miniaturized sensor and high-density digital magnetic recording technologies which require materials with large changes in electrical resistance at low magnetic fields. In this paper we report on Rapid Thermal Annealing experiments done on a series of multilayers of alternating thin permalloy (Ni80Fe20) and silver films. The layers were sputter deposited on thermally oxidized Si (100) substrates. Samples were annealed in nitrogen at temperatures ranging from 280 to 340 °C for 30 seconds to 10 minutes, yielding magnetoresistance data as high as 5% and a maximum field sensitivity of 4.6% per kA·m-1. X-Ray diffraction analysis, showing the gradual formation of an Ag (111) shoulder peak at 2θ = 38.3° upon annealing, supports a recently published hypothesis that the appearance of the GMR effect is anneal-induced by a change of the microstructure due to diffusion, causing notching and disruption of the permalloy layers in the superlattice.