For shape memory material components, a well-bonded interface will constrain the martensitic transformations and hence sacrifice the shape-memory effect and other performance. However, the stress cannot be transferred to the fiber if the interface is weak. Therefore, a compromise should be reached to achieve optimal overall performance of the composite system. Moreover, under the constraint of a matrix, the embedded SMA fibers will demonstrate a different transformation behavior to that in the free condition. In order to study the effect of phase transformation occurring in the wire on the composite overall behavior, a micromechanical model based on Piggott’s model has been developed. The mechanical behavior of the wire and matrix determined experimentally has been implemented in to the model. The results were compared with the experimental results and a good agreement has been found. The analytical and experimental results show a change in the trend of stress-strain curve which can be a sign of martensitic transformation. In other words, when the martensitic transformation takes place in the wires, the slope of the stress-strain curve for the composite specimens changes.