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The elaboration of fine grain shape memory alloys is required to improve the mechanical properties and the thermomechanical behaviour during cycling of these alloys. Usually this has been done by the addition of a suitable grain refiner. Nevertheless, the secondary effects of these grain refiners became very often difficult to control. This is why we are trying to develop a new processing route for these alloys by powder metallurgy. The powders have been obtained by gas atomization and compacted by hot isostatic pressing. Finally the alloy has been hot rolled. The microstructure of the alloy has been characterized along the different processing steps by scanning electron microscopy. The alloy obtained by this elaboration method, shows a martensitic transformation whose temperatures, enthalpy and hysteresis have been studied by differential scanning calorimetry and internal friction measurements. The alloy shows shape memory effect and good superelastic and pseudoelastic behaviour.