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The cooperative collective effects of strain-induced martensitic variant accommodation in nano- and micrograined polycrystalline TiNi shape memory alloys were discovered to form macroscopic strain-induced shearing bands—the Lüders-like deformation bands. We use the in situ electron backscattered diffraction technique and the single surface trace analysis method to unambiguously elucidate the formation and propagation of shearing bands derived from the chain effect of intergrain selective martensite habit plane variants. The macroscopic characteristics of shearing bands can be well interpreted by mesoscale crystallographic features using phenomenological crystallographic theory and Schmid’s law with a strong correlation to texture. It was also discovered that the nonlinear elastic feature in the stress-strain curve prior to the stress-strain plateau correlates to lattice/grain rotations other than martensitic variant reorientation.