The grain boundary brittleness widely exists in structural and functional materials that possess covalent bonds. Particularly, toughening the grain boundaries and simultaneously retaining the functionalities are of critical importance for functional materials. In this work, we focus on the Heulser-type Ni-Mn-X (X=Ga, In, Sn, Sb, Al, Ti) shape memory alloys, the severe grain boundary brittleness of which have hindered their developments over the past more than two decades. By performing two-step heat treatment for a Cu alloyed Ni30Cu20Mn42.4Ga7.6 alloy, a unique dual-phase configuration with a small amount of thin layer (width less than 20 µm) of single crystalline γ phase just distributing along boundaries of the martensitic grains was formed at room temperature. As a result, the bulk polycrystalline samples could be compressed with the engineering strain up to 81 % without any cracks. More importantly, the tension deformation, which was previously rather difficult for bulk single-phase Ni-Mn-X alloys, was realized in the dual-phase Ni30Cu20Mn42.4Ga7.6 alloy with a tensile strain up to 13 %, exhibiting high plasticity. Simultaneously, remarkable shape memory effect of 3.2 % under the tension condition was achieved via the martensitic transformation. Microstructure and fracture surface analysis revealed the “glue effect” of the γ phase. The high plasticity of the Ni30Cu20Mn42.4Ga7.6 alloy originated from the cooperative deformation of the martensite phase and the γ phase. This work supplies an attractive strategy of grain boundary engineering to toughen brittle functional materials.