Advanced scientific and technological achievements in the surface engineering of TiNi shape memory alloys are closely related with their mechanical performance. Electron-beam treatments could be applied in order to modify surface properties of smart materials and promote stress-induced martensitic transformations. The fundamental issue of electron-beam processing is residual elastic stresses arising from the ultrafast quenching (∼108 K/s) of thin (∼2–4 μm) surface layers. We report the experimental results on phase composition, structure and residual elastic stresses formed in the binary TiNi SMA irradiated by a low-energy (< 25 keV) high-current (∼ 25 kA) electron beam. Microstructure, fracture mechanisms and phase analysis of the as-cast and deformed tensile specimens have been studied by X-ray diffraction and electron microscopy. After electron-beam treatment, both martensitic B19′ and R phases are found in the near surface layer. The X-ray diffraction studies indicate that compressive stresses in the B2 phase of the irradiated TiNi alloy reach –460 MPa. In the fractured specimen (after tensile test) the residual stresses decrease to –160 MPa and release through the B2→B19′→B2 martensitic transformation. In-depth gradient distribution of the defect substructures responsible for the mechanical behavior of TiNi alloys was revealed.