Heat treatments are usual means for modifying alloy micro-structures and, consequently, to control mechanical properties. The aim of this work was to find suitable processes for improving the shape memory effect (SME) of Fe–Mn–Si-based alloys. In particular, we studied mechanisms that affect the plastic deformation of the austenite phase. A Fe–15Mn–5Si– 9Cr–5Ni alloy was deformed by rolling at different temperatures and subsequently annealed at recovery- and recrystallization-temperature. The mechanical properties of the material after processing were evaluated by performing tension and flexure tests. The SME of room temperature deformed specimens was measured after heating them to 550°C for shape recovery. We found that the material rolled at 800°C followed by an annealing treatment at 650°C recovers nearly 95 % of a 3 % deformation. In this thermo-mechanical condition, the material has a yield stress of 450 MPa and an ultimate tensile strength of 880 MPa, corresponding to a total elongation of about 16 %. Optical and electron microscopy observations show that the matrix annealed at high temperature contains a low density of defects. As a consequence, there are fewer nucleation sites for martensite and the associated SME is low. On the other hand, annealing at intermediate tempera-tures (around 650°C) produces a favorable structure containing a large density of stacking faults.