A finite element analysis of quasi-static, steady-state crack growth in pseudoelastic shape memory alloys is carried out for plane strain, mode I loading. The crack is assumed to propagate at a critical level of the crack-tip energy release rate. Results pertaining to the influence of forward and reverse phase transformation on the near-tip mechanical fields and fracture toughness are presented for a range of thermomechanical parameters and temperature. The fracture toughness is obtained as the ratio of the far-field applied energy release rate to the crack-tip energy release rate. A substantial fracture toughening is observed, in accordance with experimental observations, associated with the energy dissipated by the transformed material in the wake of the growing crack. Reverse phase transformation, being a dissipative process itself, is found to increase the levels of toughness enhancement. However, higher nominal temperatures tend to reduce the toughening of an SMA alloy-although the material's tendency to reverse transform in the wake of the advancing crack tip increases-due to the higher stress levels required for initiation of forward transformation.