Welding of shape memory alloys without deterioration of shape memory effect could vastly extend their applications. To retain shape memory behavior, a solid-state welding technique called friction stir welding was employed in this study. Austenitic NiTi alloy sheets of thickness 1.2 mm were joined at tool rotational speeds of 800, 1000, and 1200 rpm. Due to dynamic recrystallization, the grain refinement has occurred in the weld region. The tensile testing has shown superelastic plateau for the welds at 800 and 1000 rpm. The phase transformation behavior of different weld regions was studied in detail using differential scanning calorimeter. A marginal drift in transformation temperatures was observed in the weld. To understand the drift in phase transformation temperatures, finite element analysis was carried out with focus on temperature distribution during welding. Finally, time-dependent shape recovery of a FSW welded joint was studied and it was found that the original position was completely recovered after 27 s at a temperature of 65 C.