AbstractDeformation mechanisms activated during tensile deformation of nanocrystalline NiTi wire in martensite state were investigated by combination of two experimental methods: (i) analysis of the evolution of martensite-variant microstructures in grains of deformed wire by TEM and (ii) analysis of the evolution of martensite texture by in situ synchrotron X-ray diffraction. The obtained results are linked to the activity of various twinning processes in martensite. It is concluded that martensite reorientation proceeds via motion of interdomain interfaces, gives rise to reoriented martensite with microstructure consisting of single (001) compound-twinned domain in each grain and results in sharp two-fiber texture of the martensite. The reorientation process leaves behind only very small unrecovered strains and very few dislocation defects in the austenitic microstructure of the deformed wire after unloading and heating. Plastic deformation of B19′ martensite proceeds via peculiar deformation mechanism which combines (100) deformation twinning with [100]/(011) dislocation slip based kinking. It gives rise to very special martensite variant microstructures consisting of deformation twin bands and kink bands containing martensite lattice aligned with [010] direction and characteristic two-fiber martensite texture. Reverse martensitic transformation of plastically deformed martensite upon unloading and heating leaves behind large unrecovered strains and high density of lattice defects in austenite. But there are also significant recoverable strains up to 10%. While the martensite matrix in grains of plastically deformed wire transforms into parent austenite matrix, (20-1) deformation twins transform into {114} austenite twins.