  We study experimentally the fundamental limits of sensitivity of an atomic
radio-frequency magnetometer. First we apply an optimal sequence of state
preparation, evolution, and the back-action evading measurement to achieve a
nearly projection noise limited sensitivity. We furthermore experimentally
demonstrate that Einstein-Podolsky-Rosen (EPR) entanglement of atoms generated
by a measurement enhances the sensitivity to pulsed magnetic fields. We
demonstrate this quantum limited sensing in a magnetometer utilizing a truly
macroscopic ensemble of 1.5*10^12 atoms which allows us to achieve
sub-femtoTesla/sqrt(Hz) sensitivity.
