Severe plastic deformation (SPD) processes, are successfully employed to produce ultra fine grain (UFG) and nanocrystalline (NC) microstructures in Ni_50.7Ti_49.3 shape memory alloy. The effect of grain size on phase transformations during annealing is investigated by differential scanning calorimetry (DSC) and transmission electron microscopy (TEM). The results of comparative studies of phase transformations in coarse-grained, UFG and NC alloys after SPD and subsequent long-term (up to 100 hours) annealing at 400°C is presented. The functional properties and the innovation potential of UFG NiTi alloys is considered and discussed.