This study investigates the microstructure and properties of functionally graded NiTi alloy bilayers. The NiTi layer is printed by laser powder bed fusion on a NiTiX (where X is Hf or Cu) substrate prepared by vacuum arc remelting. Specimens produced with different thicknesses of layers, but constant thickness ratio, are examined by optical and scanning electron microscopy prior to and postannealing process at 1000 degrees C for 16 h. Scanning electron microscopy- energy-dispersive X-ray spectroscopy and transmission electron microscopy studies reveal the presence of Ti2Ni and Ni4Ti3 precipitates in the as-printed NiTi/NiTiCu samples and Ti2Ni type precipitates in as-printed NiTi/NiTiHf. Digital image correlation quantifies residual strain in the as-printed bilayer and enables strain relief to be monitored during heating. It has been shown that microcracks occurring along interfacial zones during the laser powder bed fusion are diminished after annealing heat treatment. The microcrack closure occurs by diffusion of third elements to the open microcracks, leading to precipitation and accumulation of third elements in the interfaces. Eventually, the as-printed NiTi/NiTiCu sample displays two-way shape memory effects with about 24.5% shape recovery. This work enhances understanding of controlling fabrication to yield tailored properties in additively manufactured functionally graded NiTi-based materials.|This article investigates a Ni-rich NiTi layer deposited on a NiTiX (Hf or Cu) layer by laser powder bed fusion. The interface is characterized, and annealing eliminates microcracks. Residual stress and diffusion of the third element are examined. The as-printed bilayer exhibits two-way shape memory with approximate to 24.5% shape recovery.image (c) 2024 WILEY-VCH GmbH