The effect of γ-phase on two-way shape memory effect (TWSME) of polycrystalline Ni56Mn25-xCoxGals.9Gd0.1 alloys was investigated.The results show that an appropriate amount of ductile γ-phase significantly enhances the TWSME.The largest TWSME of 1.4％ without training is observed in Ni56Mn21Co4Ga18.9Gd0.1 alloy,and this value is increased to 2.0％ after thermomechanical training.The as-trained TWSME decays over the first five thermal cycles and then reaches a stable value as the number of cycles further increasing.Only the degradation of 0.2％ is observed after 100 thermal cycles.The better TWSME and thermal stability are ascribed to the stable extra stress field formed by the plastically deformed γ-phase.