The present study in this thesis has attempted to resolve one of the key aspects of enhancing predictability of macroscopic behavior of Shape Memory Alloy (SMA) wire by considering variation of local phase inhomogeneity. Understanding of functional fatigue and its relation with the phase distribution and its passivation is the key towards tailoring thermal Shape Memory Alloy actuators’ properties and performance. Present work has been carried out in two associated areas. First part has covered solving a coupled thermo-mechanical boundary value problem where initial phase fractions are prescribed at the gauss points and subsequent evolution are tracked over the loading cycle. An incremental form of a phenomenological constitutive model has been incorporated in the modelling framework. Finite element convergence studies using both homogeneous and inhomogeneous SMA wires are performed. Effects of phase inhomogeneity are investigated for mechanical loading and thermo-electric loading. Phase inhomogeneity is simulated mainly due to process and handling quality. An example of mechanical boundary condition such as gripping indicates a negative residual strain at macroscopic behavior. Simulation accurately captures vanishing local phase inhomogeneity upon multiple cycles of thermo-mechanical loading on unconstrained straight SMA wire. In the second part, a phase identification and measurement scheme is proposed. It has been shown that by employing variation of electrical resistivity which distinctly varies with phase transformation, martensite phase volume fraction can be quantified in average sense over the length of a SMA wire. This can be easily achieved by using a simple thermo-mechanical characterization setup along with resistance measurement circuit. Local phase inhomogeneity is created in an experimental sample, which is subjected to electrical heating under constant mechanical bias load. The response shows relaxation of the initial shrinkage strain due to local phase. Results observed for thermo-electric loading on the inhomogeneous SMA wires compliment the results observed from the simulated loading cases. Several interesting features such as shrinkage of the inhomogeneous SMA wire after first loading cycle, relaxation of the residual strain over multiple loading cycles due to the presence of inhomogeneity are captured. This model promises useful applications of SMA wire in fatigue studies, SMA embedded composites and hybrid structures.