Abstract The effect of Gd addition on microstructure, martensitic transformation and mechanical properties of Ni 50 Mn 36 Sn 14 ferromagnetic shape memory alloy has been investigated. The results show that Gd addition leads to some changes in the microstructure and crystal structure. Martensitic transformation is observed in Ni 50 Mn 36 Sn 14 alloys with adding different amount of Gd. The compressive strength and compressive strain of alloys is notably enhanced with the increase in Gd content. The compressive strength increases from 448 MPa to 707 MPa and the compressive strain increases from 4.5% to 9.0% with increasing Gd content from 0 at.% to 2 at.%. The mechanism of the improved mechanical properties is also revealed.