It was found that in FeMnSiCrNi shape memory alloy (SMA) epsilon martensite is made of many sub-units and there always exist retained austenite interlayers among them, proved by TEM and HREM. The retained austenite might act as the pre-existent nucleus for reversal transformation, resulting in good crystallographic reversibility and nice WE. XRD analysis showed that stress-induced c martensites under tensile test transform into Y by following compression deformation. Furthermore, under the condition of strain circle at +/-1.5%, the strain fatigue life of Fe-16.86Mn-4.50Si-10.30Cr-5.20Ni (wt%) SMA reaches 1300 times, far more than that of Fe-13Mn-1.0Si-0.70C rail steel, which is only 110 times. Further research indicated that FeMnSi SMA could be applied to the temperature compensation system for self-accommodation and might be developed into a new type material to counteract the low cycle fatigue overloading.