Near-surface-mounted (NSM) iron-based shape memory alloy (memory-steel) bars represent a novel type of reinforcement for prestressed strengthening of concrete structures. To examine the bond behaviour of these embedded reinforcements in detail, fibre optic (FO) methods can be used. In this study, distributed FO strain measurements were performed in small-scale bond experiments and large-scale structural experiments using prestressed and non-prestressed NSM memory-steel bars. The experiments demonstrated the FO measurement technique's feasibility on memory-steel bars, provided insights into the complex strain profiles before and after prestressing, and revealed the active bond lengths. When the memory-steel bar was subjected to an external load, a reduction in the bar's stiffness resulted in an increase in active bond length. The results furthermore highlighted the importance of rigid bar fixations to avoid prestress loss. The obtained strain distributions were also processed to calculate the distributed slip and axial bar stress, and to investigate the parameters of three different bond shear stress–slip laws (BSSLs). A linear increasing BSSL with a nonlinear bar stiffness led to a realistic calculation of the axial stress in the bar, while resulting in acceptable slip and strain. The implementation of a constant Young’s modulus consistently overestimated the axial bar stress.