Effect of Gd addition on microstructure, martensitic transformation and strain recovery characteristics was investigated. Gd addition resulted in the significant reduction of grain size and formation of Gd-rich phase. The Gd-rich phase was identified as Gd3(Ti,V) phase with an orthorhombic structure. The solution treated (Ti-13V-3Al)100−xGdx alloys underwent a α″ → β transformation during heating, irrespective of Gd content. But Gd addition led to a slight drop of martensitic transformation temperatures. In addition, the moderate Gd addition can promote the achievement of outstanding mechanical and functional properties due to the combination of the grain refinement and precipitation strengthening of Gd-rich phase in grain interior. Ti-V-Al alloy with an optimal Gd content, which was Ti-V-Al alloy containing 0.3 at.% Gd, showed the largest recoverable strain of 4.9% at a pre-strain of 6% and the ultimate tensile stress of 925 MPa. Meanwhile, Ti-V-Al alloy had a superior elongation of 20.7%, as 0.3 at.% Gd was added.