The mechanism of domain nucleation during ferroelastic domain switching is revealed by utilizing phase-field simulations. A complete compression-tension hysteresis loop is simulated, and the results show the nucleation of new domains at domain walls (DW). Due to relaxation of strain energy, the coherent DWs of the surviving domains often form features like steps, crevices and corners, and nucleation of new domains primarily takes place at these sites in a repeated fashion. The change in elastic strain energy around these sites is sufficient to provide the energy necessary for ferroelastic domain nucleation (FDN). The present simulations reveal that the apparent ellipsoidal shape of a nucleus might be an oblate spheroid when the nucleation takes place at a crevice. The present work also reveals that nucleation of triangular shaped domains is equally probable, and they take place at the steps or corners of DWs. Display omitted