An experimental investigation of the micro and macromechanical transformation behavior of polycrystalline NiTi shape memory alloys was undertaken. Special attention was paid to macroscopic banding, variant microstructure, effects of cyclic loading, strain rate and temperature effects. Use of an interference filter on the microscope enabled observation of grain boundaries and martensitic plate formation and growth without recourse to etching or other chemical surface preparation. Key results of the experiments on the NiTi include observation of localized plastic deformation after only a few cycles, excellent temperature and stress relaxation correlation, a refined definition of "full transformation" for polycrystalline materials, and strain rate dependent effects. Several of these findings have critical implications for understanding and modeling of shape memory alloy behavior. © 2004 Elsevier Ltd. All rights reserved.