Vacuum-arc melted Ni 24.7 Ti 50.3 Pd 25.0 and Ni 24.7 Ti 49.3 Pd 25.0 Sc 1.0 (at.%) alloys were investigated to study effect of Sc micro-addition on microstructure and transformation behaviour of NiTiPd alloy. Study showed that microstructure of homogenized NiTiPd alloy consisted of NiTiPd matrix interspersed with Ti 2 (Ni,Pd) precipitates. In contrast, NiTiPdSc alloy showed a single phase NiTiPdSc matrix with a few scandium oxide particles at isolated places. TEM and X-ray diffraction studies confirmed matrix phase of the alloys to be of orthorhombic B19 structure. TEM observations showed that NiTiPdSc alloy had relatively larger martensite plates with a smaller twin ratio compared to that of NiTiPd alloy. Also, APB (anti-phase boundary) like regions with twinless martensites was observed in both the alloys, area fraction of APB-like regions being more in NiTiPdSc alloy. Thermal analysis showed that transformation temperatures (TTs) of NiTiPd alloy decreased significantly with addition of Sc. The martensite finish temperature (M f ) of 181 °C for NiTiPd alloy lowered to 139 °C upon 1.0 at.% Sc addition. The transformation hysteresis of Ni 24.7 Ti 49.3 Pd 25.0 Sc 1.0 (at.%) alloy was measured to be 7 °C, significantly lower than that of 15 °C for Ni 24.5 Ti 50.0 Pd 25.0 Sc 0.5 alloy, reported in literature. Alloy purity, lower volume fraction of second phase and presence of twinless/small twin ratio martensite in microstructure is believed to be the reasons for such low transformation hysteresis. The transformation behaviour of the alloys upon stress-free thermal cycling was found stable, variation in TTs being within 1–2 °C.