Abstract: Low-cost iron-based shape memory alloys (SMAs) show great potential for engineering applications. The developments of new processing techniques have recently enabled the production of nanocrystalline materials with improved properties. These developments have opened avenues for newer applications for SMAs. The influence of severe plastic deformation induced by the high-speed high-pressure torsion (HSHPT) process on the microstructural evolution of an Fe–Mn–Si–Cr alloy was investigated. Transmission electron microscopic analysis of the alloy revealed the existence of nanoscale grains with an abundance of stacking faults. The high density of dislocations characteristic of severe plastic deformation was not observed in this alloy. X-ray diffraction studies revealed the presence of ε-martensite with an HCP crystal structure and γ-phase with an FCC structure.