In this study, microstructure and mechanical properties of an austenite NiTi alloy treated with laser shock peening (LSP) was investigated. It was found that the thickness of shock affected layer is about 250–300μm. The surface hardness of the specimen is increased by approximately 10% after LSP. Laser induced shock introduces slightly residual compressive stress in the peened specimen. The superleastic stress–strain curves of the fully LSP processed NiTi material show no change in phase transition stress, about 100MPa decrease in martensite yield stress, and a loss of maximum transition strain about 12% after LSP. The ultrahigh-strain-rate plastic deformation by LSP results in dislocation substructure and amorphization underneath the surface which are responsible for the hardness increase and superelastic strain loss.