The 10-million Swedish crown ($1.54 million) prize, awarded by The Royal Swedish Academy of Sciences, recognized the pair for revealing a physical effect called giant magnetoresistance.
"It is thanks to this technology that it has been possible to miniaturize hard disks so radically in recent years," the academy said in a statement.
Giant magnetoresistance -- GMR for short -- works through a large electrical response to a tiny magnetic input.
When atoms are laid down on a hard disk in ultra-thin layers, they interact differently than when spread out more. This makes it possible to pack more data on disks.
Fert and Gruenberg, 68, figured out how to stack nanometer-thin layers of magnetic and non-magnetic atoms to produce the GMR effect.
"The story of the GMR effect is a very good demonstration of how a totally unexpected scientific discovery can give rise to completely new technologies and commercial products," the Nobel committee wrote.
It works because of a property called spin. Electrons -- the charged particles within atoms -- "spin" in different directions under various circumstances, producing the changes in resistance that are used to store data.
Thanks to advances based on GMR, a typical laptop computer now holds about 100 gigabytes of data. That is equal to the information contained in a kilometer-long (3,280-foot) bookshelf, roughly an entire library floor of academic journals.
Fert and Gruenberg each made the discovery independently of the other. They shared the 2007 Japan Prize for their work.