The magnetic and magnetotransport properties of Ni80Fe20/La0.7Sr0.3MnO3 (NiFe/LSMO) bilayers were investigated after bombarding the LSMO surface with low-energy Ar+ or O2 +/Ar+ ion beams before the growth of the top NiFe layer. A variety of magnetic properties are revealed, including an asymmetric two-stepped hysteresis loop with an exchange bias loop shift, and alternatively, a symmetric two-stepped hysteresis loop with an enhanced coercivity. Polarized neutron reflectometry measurements provide details of the magnetic depth profile and interface layer magnetism at different temperatures. The LSMO surface modifications determine a complex magnetic and electric NiFe/LSMO interface having a strong effect on the magnetoresistance of the bilayer. Surface engineering based on ion beam bombardment is presented as a promising technique for optimizing the electronic and magnetic properties of NiFe/LSMO junctions for future device applications.