Embedding particulate reinforcements in aluminum matrices to form aluminum matrix composites (AMCs) is an attractive, alternative and innovative process to enhance the mechanical properties of aluminum alloys. Shape memory alloys (SMA), e.g. NiTi (nitinol), are good candidates of reinforcement agents and have the unique property of being able to recover their shape before deformation throughout heating, the so called shape memory effect (SME). In previous studies, there remains a research gap allowing to correlate the damage mechanism and its effect on mechanical properties in high strength AMCs. The present work aims at developing an innovative and functional Al 7075/NiTi composite incorporating internal stresses in the vicinity of reinforcements and understanding their effect on fatigue crack growth (FCG). The internal stresses are introduced via SME of the embedded NiTi particles in the Al matrix. The patchwork of residual stresses induces dissipation of energy on crack tip, in combination with crack trapping and deflection mechanism, enhancing fatigue crack growth resistance. Friction stir processing (FSP) was shown to be an appropriate manufacturing process for particulate aluminum matrix composites (AMCs) due to mitigation of critical intermetallic formation between particles and matrix. Moreover, multiple FSP passes can homogenize the particles in the aluminum matrix. Abnormal grain growth (AGG), commonly observed in FSPed Al 7075 after post-process solution heat treatment (SHT), was present after the manufacturing process. A methodology to avoid its presence was proposed. Afterward, the effect of AGG on FCG without the presence of NiTi particles was investigated. For the Al 7075/NiTi composite following the activation of SME, the different levels of induced internal strain fields in the vicinity of the NiTi particle were quantified. An innovative local measurement involving FIB micro-hole drilling assisted with DIC was developed. The damage mechanism at the crack tip with the presence internal stresses is investigated on FCG and correlated with the plastic zone size.