An in-situ high resolution digital image correlation investigation during uniaxial tensile deformation reveals the recoverable and the non-recoverable strain mechanisms in a Ni₅₁Ti₄₉ alloy with a mean grain size of 35 μm. Recoverable strain is due to the martensitic transformation, for which more than one variant per grain can be activated. The majority of the activated variants exhibit high Schmid factor. The variant selection can be influenced by shear transmission across grain boundaries, when the geometrical compatibility between the neighboring habit plane variants is favourable; in these cases variants that do not have the highest Schmid factor, with respect to the macroscopically applied load, are activated. The experimentally determined transformation strains agree well with theoretical calculations for single crystals. The non-recoverable strain is due to deformation slip in austenite, twinning in martensite and residual martensite. The results are discussed in view of possible twinning modes that can occur in austenite resulting in significant non-recoverable strain.