Abstract: We propose a thermodynamic theory that permits us to connect the size of the temperature hysteresis loop to the interfacial energy between martensite and austenite. The free energy is a function of four variables, viz. deformation of austenite, deformation of martensite, phase fraction and temperature. A diagonal line inside the hysteresis loop in the deformation-temperaturediagram is identified as the line of unstable phase equilibrium. Upon reaching this line the phasemixture loses its (meta-)stability and the transformation from one phase to the other shouldoccur. The theoretical results are supported by experiments on NiTi and CuAINi specimens.