The influence of thermo-mechanical processing on the microstructure and functional properties of a Fe–17Mn–5Si–10Cr–4Ni-1(V–C) (wt%) shape memory alloy was systematically investigated. The as-received material was subjected to 25 % cold rolling followed by a recrystallization at 925 °C and single or double aging treatments. Transmission electron microscopy revealed the formation of the ε-martensite and annealing twin boundaries and Shoji-Nishiyama orientation relationships of ε-martensite and γ-austenite in double aged specimen. Cyclic tensile testing demonstrated that the recrystallized and double aged alloy exhibited excellent pseudoelasticity. In the incremental strain test, the alloy achieved the highest peak stress and pseudoelasticity at each cycle. In the constant stresses test, the alloy accumulated a minimal residual strain of only 0.12 % over 50 cycles. This stability was attributed to a strong precipitation strengthening and the interactions between the martensite and the refined microstructural features. In addition, the recrystallized and double aged sample resulted in the greatest recovery stress of 450 MPa upon heating after pre-straining, because of its high yield strength suppressing new martensite formation during cooling process. The results of high-resolution transmission electron microscopy identified a non-Shoji-Nishiyama orientation relationship between the stress-induced ε-martensite after the stress recovery test and γ-austenite matrix, inducing additional irrecoverable strain and raising the recovery stress. Overall, the study can demonstrate that the tailored thermo-mechanical processing enables optimizing the functional performance of FeMnSi alloys.