The thermal efficiency of the solid‐state engine (SSE) based on the shape‐recovery phenomenon accompanied by the martensite‐parent‐phase (M→P) transformation has been evaluated. Particular application is made for the memory components made with the Nitinol alloys. The result is expressed in terms of the hot and cold reservoir temperatures (TandT0), the latent heat of the M→P transformation, &Dgr;H, the fraction of the M→P transformation, &agr;, and a coefficient &bgr; that depends on the geometry and type of the deformation of the memory component. The relationship between the efficiencies of the SS and the Carnot engines is discussed. The factor &agr; is expressed in terms ofTc, the critical temperature under an applied load, the degree of prestraining of the component, and the volume change involved in the M→P transformation. It is seen that the maximum of the thermal efficiency approaches that of the Carnot engine at anx=T−T0value that depends onT0, &Dgr;H, and &agr;. ChoosingT0=297 K and a Nitinol alloy with &Dgr;H=2 cal/g, the maximum efficiency, about 20&percent;, occurs atx=75 K. Moreover, for a steady‐state heat‐mechanical energy conversion, the critical temperature of the memory component is found in terms of theTandT0temperatures. The engine efficiency in terms of the energy loss due to friction and the heat‐transfer coefficient is analyzed and estimated to be about 16&percent;. It is seen that higher thermal efficiency can be obtained if a Nitinol alloy with a largerHvalue than given above can be found.