Abstract Microscopic residual stress evolution in different austenite (γ) grains during shape memory process in an FeMnSiCr alloy was investigated using the white X-ray microbeam diffraction technique. The use of high-energy white X-ray microbeam with small beam size allowed us to measure the microscopic residual stress in coarse γ grains with specific orientation. After tensile deformation large compressive residual stress was evolved in γ grains due to the formation of stress-induced ε martensite, but upon recovery heating it almost disappeared as a result of reverse transformation of martensite. The magnitude of compressive residual stress was higher in grains with orientations close to 〈144〉 and 〈233〉 orientations than in a grain with near 〈001〉 orientation. Analysis of the microstructure of each grain using electron backscattering diffraction suggested that the difference in the magnitude of compressive residual stress could be attributed to different martensitic transformation characteristics in the grains.