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This paper discusses the effect of different heat treatment procedures on the microstructural characteristics, damping capacities, and mechanical properties of CuAlNi shape memory alloys (SMA). The investigation was performed on samples in the as-cast state and heat treated states (solution annealing at 885 °C/60'/H 2 O and after tempering at 300 °C/60'/H 2 O). The microstructure of the samples was examined by light microscopy (LM) and scanning electron microscopy (SEM) equipped with a device for energy dispersive spectrometry (EDS) analysis. Light and scanning electron microscopy showed martensitic microstructure in all investigated samples. However, the changes in microstructure due to heat treatment by the presence of two types of martensite phases (β 1' and γ 1' ) influenced alloy damping and mechanical properties by enhancing alloy damping characteristics. Heat treatment procedure reduced the alloys' mechanical properties and increased hardness of the alloy. Fractographic analysis of the alloy showed a transgranular type of fracture in samples after casting. After solution annealing, two types of fracture mechanisms can be noticed, transgranular and intergranular, while in tempered samples, mostly an intergranular type of fracture exists.