We report on the development of highly sensitive SQUIDs featuring sub-micrometer loop dimensions. The integration of high quality and low capacitance SIS Nb/AlO x /Nb crosstype Josephson tunnel junctions results in white flux noise levels as low as 66 n 0 /Hz 1/2 , well below state-of-the-art values of their Nb-based counterparts based on constriction type junctions. Estimation of the spin sensitivity of the best SQUIDs yield S 1/2 < 7 B /Hz 1/2 in the white noise region, suitable for the investigation of small spin systems. We discuss fabrication challenges, show results on the electrical characterization of devices with various pickup loops, and describe options for further improvement, which may push the sensitivity of such devices even to single spin resolution. _____________________________________________________________________________________________