Iron-based shape memory alloys (Fe-SMA) have been used successfully in the previous years as prestressing reinforcement in the form of rebars, rods and flat strips, for various types of structural elements and loading scenarios. This paper introduces a new application of this material in the form of thin wire. An experimental characterization study is presented herein for Fe-SMA wire that was drawn to a diameter of 0.5 mm, regarding its tensile stress-strain response and recovery stress development upon heating, for different activation temperatures and prestraining levels. Furthermore, an investigation is presented regarding the effects of heat treatment conditions on the mechanical response and prestressing performance of the wire. For the optimum heat treatment conditions and activation temperature range considered in this study, the measured tensile strength and recovery stress of the Fe-SMA wire was 1117 MPa and up to 390 MPa, respectively. The results indicate a strong potential of Fe-SMA as a candidate prestressing material where flexible wire cross-sections of small diameter are desired instead of larger, solid cross-section tendons (e.g., multi-strand wire ropes or concrete confinement spirals), or as novel short fiber reinforcement for concrete with prestressing capabilities.