The microstructure and superelastic response of a Ni50.3Ti29.7Zr20 high-temperature shape memory alloy were studied. The alloy exhibited a recoverable strain level of 5% at 170 °C and near-perfect superelasticity up to 250 °C under 3% applied strain when fine precipitates were present. In this case, large martensite variants easily formed during the stress-induced martensitic transformation while dislocation motion was impeded. In contrast, poor superelastic response was obtained in samples containing large particles that constrain martensite formation to channels between elongated precipitates.