This study focuses on the functional stability of [001]-oriented Fe41Ni28Co17Al11.5Ta2.5 (at.%) single crystals. It is shown that functional degradation of aged FeNiCoAlTa, containing fine dispersed γ′-particles ∼5–8nm in diameter is caused by the interaction of different martensite variants under cyclic loading in tension. Superelastic cycling experiments up to 4.5% total strain resulted in the accumulation of permanent strain mainly caused by the formation of retained martensite. In situ observations were conducted in order to evaluate the local strain evolution and martensite variant interactions on the meso- and microscale. Optical microscopy and transmission electron microscopy observations revealed various differently oriented martensite variants which were retained upon 100 superelastic cycles. In addition, fine martensitic structures remaining in the vicinity of the γ′ precipitates were found after mechanical cycling, which are shown to be important for cyclic degradation in Fe-based shape memory alloys.