The effect of grain boundary on martensitic and reverse transformation was examined using Fe-Ni bicrystals with a tilt or a twist boundary. Tilt bicrystals show significantly higher martensite-start temperature (M-s) than single crystals or twist bicrystals. Coarse lenticular martensites were symmetrically adjoined at the tilt boundary although tiny martensites were homogeneously distributed in twist bicrystals and single crystals. In the vicinity of boundary, some variants with the habit plane almost parallel to the boundary were preferentially selected among 24 habit plane variants irrespective of boundary-type. Furthermore, equivalent variants were adjoined at the tilt boundary. Such characteristic nucleation of martensites can be regarded as an example of self-accommodation across the boundary, which is called cooperative nucleation (C-N). The C-N must enhance the heterogeneous nucleation of martensites at the boundary since it effectively reduces the strain energy due to the formation of martensites. On the other hand, the C-N led to the retardation of reverse transformation on heating and the formation of numerous sub-boundaries in reversed gamma phase near the tilt boundary. Thus the transformation behaviour in bicrystals was found to depend strongly on the grain boundary character.