Shape memory alloys (SMAs) can re-establish their initial geometry after a strong mechanical deformation. The shape memory effect relies on a martensitic transformation which is (almost) fully reversible. Today, SMAs are often used for actuators as they can provide large actuation forces and strains. However, the service life of an SMA component is often limited by functional and structural fatigue. Functional fatigue refers to the degeneration of specific functional characteristics, such as actuator stroke, recoverable strain, plateau stresses, hysteresis width, or transformation temperatures. It is caused by the accumulation of transformation-induced defects in the microstructure. In contrast, structural fatigue refers to the formation and growth of fatigue cracks. The present work provides a brief overview on these two degenerative processes as they are of utmost technological importance. While our fundamental understanding of these phenomena has improved during the last two decades, there are still fields which require scientific attention. The functional stability of SMAs can be improved by (1) making phase transformations processes smoother and (2) by improving the material’s resistance to irreversible processes like dislocation plasticity. It is shown that the formation of microcracks plays an important role for structural degeneration. The present work provides examples for microstructural effects on short crack growth in SMAs. It is also demonstrated that there are cases where functional and structural fatigue act together.