In this paper, the effects of Mn element and rare earth element Gd on the microstructure, thermal stability, mechanical properties and shape memory effect of polycrystalline Cu-12.0Al-4.0Ni and Cu-12.0Al-4.0Ni-1.5Mn-xGd high-temperature shape memory alloy were investigated. The results show that the Cu-12.0Al-4.0Ni alloy exhibits millimeter-sized grain, dual-phase structure with coexistence of 18R and 2H martensite and poor thermal stability. When the Mn and Gd element was added to Cu-12.0Al-4.0Ni alloys, the grain size can be refined by an order of magnitude, and the 2H martensite disappeared completely, accompanied by the formation of the AlCu4Gd phase, meanwhile, thermal stability is significantly improved. The grain refinement improves the mechanical properties and shape memory effect of Cu-12.0Al-4.0Ni-1.5Mn-xGd alloys. When x = 0.3, the compressive fracture stress, compressive fracture strain and recoverable strain can reach 969 MPa, 15 % and 8 %, respectively.