a b s t r a c tWe use multi-million-atom molecular dynamics (MD) simulations with an embedded atom model potential parameterized for NiAl to study temperature-and stress-induced martensitic phase transformations in nanocrystalline shape memory alloys. Nucleation of the martensite phase occurs in the grain interiors and grows outward up to the point where further transformation is hindered by the constraints imposed by neighboring grains. Decreasing grain size inhibits the transformation process and the temperature-induced transformation is completely suppressed for samples with average grain sizes of 7.5 nm and less. Interestingly, mechanical loads can induce the martensitic transformation in samples with ultra-fine grains and, quite surprisingly, the sample with 7.5 nm grain size exhibits improved, ultra-fast, superelasticity as compared with its coarser grain counterparts. The simulations provide a picture of the processes that govern the performance and fundamental limits of nanocrystalline shape memory alloys with atomistic resolution.