Abstract The advantages of Cu-based shape memory alloys (SMAs) over the more popular Ni-Ti alloys are their low cost and easy processability coupled with good electrical and thermal conductivity. However, these alloys suffer from severe brittleness due to highly ordered structure causing difficulty in cold working; consequently, their applicability in the form of wires and sheets is impeded. In an attempt to improve the ductility of these alloys, varying amounts of Nb and Ag were added to Cu-12Al-4Mn, a known SMA, and the effect of these additives on the shape memory properties as well as the microstructure through grain refinement were analyzed. Detailed microstructural observations indicated that the addition of more than 2 wt% of Ag or Nb was detrimental to the martensitic structure that was formed on quenching. Furthermore, the addition of Nb led to the formation of a more desirable martensitic microstructure, namely the fine β1’ phase, whereas the inclusion of Ag caused the formation of the coarse γ′1 phase. Based on the observed strength and shape memory effect, it was concluded that Nb significantly improved the mechanical as well as the shape memory properties of the base alloy.