NiTi alloys (SMAs) are unique alloys, which have two attractive properties, shape memory effect, super-elasticity and biocompatibility. Each property strongly depends on the composition, temperature and structure. To have shape memory and super elastic behavior at the same time, a bi-layer composite, austenitic (A) /martensitic (M) NiTi alloy was designed and made to investigate the properties. Layers with2: 1 ratio (M: A) were bonded under diffusion bonding process in vacuum tube furnace at 1000⁰C, for 3 hours under 20 MPa compressive stress. To evaluate the effect of interface zone on the properties, specimens were annealed in vacuum tube furnace at1000 ⁰C for 5 and 10 hours. The interface was investigated by optical microscopy, and chemical composition gradient in the interface zone was analyzed using line scan analysis with energy dispersive X-ray spectroscopy. Mechanical properties of the interface zone were studied using micro-hardness measurements. The shape memory and super elastic behavior of bi-layer were investigated using loading-unloading test and in-situ thermal heating by applying electrical current. The results depicted that annealing time has significant effect on the width of interface zone, and thus a microstructural gradient has been developed, within the thickness of the specimen. It was found that the bi-layer specimens could act as a functionally graded material due to their chemical composition gradients that is desirable for better controllability in actuation applications.