The present digital image correlation study characterised the local axial and shear strain fields of a 56Ni–44Ti wt.% shape memory alloy with an average grain size of 100 μm, under uniaxial monotonic and cyclic loading-unloading in tension. To elucidate the grain size effect, the results were compared with a previous investigation of the same alloy with an average grain size of 10 μm. The maximum local axial strain rate signified the direction and extent of the localised transformation. The widened single inclined transformation band and multiple criss-crossing patterns assist in straightening the sample edge by releasing an in-plane moment instigated by local shear strains. Electron back-scattering diffraction analyses showed that the plastic strain within the B2 grains and the remnant B19′ variants account for the residual strains after unloading. Smaller grain sizes correspond to greater constraint from grain boundaries, higher interfacial energy and higher elastic strain energy barrier for transformation, and smaller intragranular heterogeneity of plastic deformation. This is reflected in the increases to the transformation start stress, stress level and stress-strain slope within the macroscopic stress plateau region and smaller complete transformation strain, super-elastic and residual strains upon unloading.