Step-edge Josephson junctions (SEJ) have been fabricated on sapphire substrates with in situ deposited films of CeO$_2$ buffer layer and YBa$_2$Cu$_3$O$_{7}$ films on the low angle steps. Direct coupled SQUID magnetometers with the SEJ were formed on 1 cm X 1 cm R-plane sapphire substrates. Typical 5-${mu}{ extrm}{m}$-wide Josephson junctions have R$_{N}$ of 3 Ω and I$_{c}$ of 50 $mutextrm{A}$ at 77 K. The direct coupled SQUID magnetometers were designed to have pickup coils of 50-${mu}{ extrm}{m}$-wide 16 parallel loops on the 1 cm X 1 cm substrates with outer dimension of 8.8 mm X 8.8 mm. The SEJ SQUID magnetometers exhibit relatively low 1/f noise even with dc bias control, and could be stably controlled by flux-locked loops in the magnetically disturbed environment. Field noise of the do SQUID was measured to be 200∼300 fT/Hz$^{1}$2/in the white noise region and about 2 pT/Hz$^{1}$2/ at 1 Hz when measured with dc bias method.hod.d.