Shape memory alloys (SMAs) have received much attention to be employed as sensors and actuators in various industrial and biomechanical applications in micro-electro-mechanical systems, given their special capabilities of creating large displacements and high energies in small size. In the last decade, there has especially been much researches in constitutive modeling of these materials in order to understand their behavior in small size. Thus, in this thesis, micromechanical modeling of Ti-Ni SMA has been developed, and the effect of external loading on microstructure evolution has been studied. The most important and essential step in micromechanical modeling of materials is to fully understand microstructure of the material being studied. Therefore, in this thesis, several studies have been conducted to understand the complex microstructure of Ti-Ni SMA. In order to attain the micromechanical model, a previously-proposed model is discussed. Then, conditions are introduced without which the proposed model is not capable of predicting behavior of SMAs during deformation in microscale. Thereafter, a thermodynamically consistent model is developed which is able to predict behavior of these materials during reorientation and detwinning processes while deforming in microscale. Since the employed core model has been already verified by experimental findings, the proposed approach is evaluate by comparing the numerical results of the two model. Due to uncertainity in behavior of the single crystal Ti-Ni, loading and deformation response in single crystal Ti-Ni are first investigated. Furthermore, to achieve a general knowledge of this alloy’s behavior in microscale, microstructure’s behavior regardless of microstructural details, during deformation under loading are first investigated. Finally, efforts have been made to achieve a complete understanding of behavior of this alloy in microscale with the microstructural details to be considered. The main feature of this approach is to model the interface between different domains of microstructure using diffuse-interface approach. Moreover, modeling microstructure during deformation in microscale using diffuse-interface approach is proposed for the first time. Key words: Shape memory alloys, Micromechanical model, Reorientation and detwinning processes, Diffuse-interface.