Heusler L21 alloy Ni54Mn20Fe1Ga25 subjected to megaplastic deformation by high pressure torsion was first systematically investigated by in situ phase x-ray diffraction, transmission and scanning electron microscopy. It is established that shear deformation by torsion at room temperature grinds the polycrystalline structure of the alloy to a nanocrystalline and partially amorphous state. It is found that as the pressure value (from 3 to 5 GPa) and the degree of deformation (from 2 to 5 revolutions) increases, total atomic disordering and stepwise structural-phase transformation according to the scheme B2(BCC)→A2(BCC)→A1(FCC) occur. It is shown that annealing at temperatures below 570 K entails devitrification of the amorphous phase, and at 620 K and above – the restoration of the L21 structure. The dimensional effect of suppressing thermoelastic martensitic transformation in a nanostructured austenitic L21 alloy with a grain size less than 80 nm while its cooling down to 120 K. The ability to thermoelastic martensitic transformation and shape memory effect in submicrocrystalline ultrafine alloy after recrystallization annealing at temperatures exceeding 600 K is restored.