Purpose – This paper aims to create and to study multifunctional shape memory polymer (SMP) composites having temperature-sensing and actuating capabilities by embedding thermochromic particles within the polymer matrix. Design/methodology/approach – The multifunctional materials were fabricated following a process consisting of blending (of the thermochromic particles and the SMP at various ratios), mixing, degasing, moulding and thermal curing, prepared by incorporating thermochromic particles within the polymer. The effect of the thermochromic particles on the thermomechanical properties and thermally responsive shape memory effect of the resulting multifunction SMP composites were characterised and interpreted. Findings – It was found that exposure of the composites to temperatures above 70°C led to a pronounced change of their colour that was recorded by the thermal and electrical actuation approaches and was reproducibly reversible. It was also found that the colour of the composites was independent of the mechanical state of the SMP. Such effects enabled monitoring of the onset of the set/release temperature of the SMP matrix. Furthermore, the combination of thermochromic additive and the SMP resulted in significantly improved thermomechanical strength, absorption of infrared radiation and the temperature distribution of the SMP composites. Research limitations/implications – The temperature-sensing and actuating capabilities of the polymeric shape memory composites developed through this study will help to extend the field of potential applications of such composites to fields including sensors, actuators, security labels and information dissemination, where colour indication is an advantageous feature. Originality/value – The SMP composites capable of temperature sensing and actuating are novel.