The iron-based shape memory alloy (FeMnNiAl) exhibits desirable pseudoelastic properties across a wide range of temperatures. Accompanied with high transformation stress magnitudes, this material system holds significant potential for applications requiring high work output levels. However, the alloy also exhibits pronounced grain size dependance which is not well understood. In addition, challenges associated with the functional response under cyclic loading have been reported for this system. Despite notable progress in advancing and optimizing the cyclic properties of this system, there is a lack of a comprehensive understanding regarding the metallurgical phenomena ruling the functional fatigue properties of FeMnNiAl. This work aims to address this aspect by providing a deeper insight into the source of functional fatigue through in-situ identification of phases and lattice microstrains during cyclic loading.