•Stress-induced martensitic transformation in the target alloy proceeds in a homogeneous deformation mannar, instead of a conventional Lüders-like deformation.•Microstructural features of the target alloy including nanocrystallinity and dispersed nanoprecipitates yield the homogeneous deformation and are achieved by directly aging a cold-rolled Ti-51.5Ni alloy.•Stable room-temperature superelasticity and elastocaloric effect are obtained and ascribed to the low dislocation activity during stress cycling. Functional stability of superelasticity is crucial for practical applications of shape memory alloys. It is degraded by a Lüders-like deformation with elevated local stress concentration under tensile load. By increasing the degree of solute supersaturation and applying appropriate thermomechanical treatments, a Ti-Ni alloy with nanocrystallinity and dispersed nanoprecipitates is obtained. In contrast to conventional Ti-Ni alloys, the superelasticity in the target alloy is accompanied by homogeneous deformation due to the sluggish stress-induced martensitic transformation. The alloy thus shows a fully recoverable strain of 6% under tensile stress over 1 GPa and a large adiabatic temperature decrease of 13.1 K under tensile strain of 4.5% at room temperature. Moreover, both superelasticity and elastocaloric effect exhibit negligible degradation in response to applied strain of 4% during cycling. We attribute the improved functional stability to low dislocation activity resulting from the suppression of localized deformation and the combined strengthening effect of nanocrystalline structure and nanoprecipitates. Thus, the design of such a microstructure enabling homogeneous deformation provides a recipe for stable superelasticity and elastocaloric effect. Display omitted