Equations describing deformation defects, damage accumulation, and fracture condition have been suggested. Analytical and numerical solutions have been obtained for defects produced by a shear in a fixed direction. Under cyclic loading the number of cycles to failure well fits the empirical Koffin-Manson law. The developed model is expanded to the case of the micro-plastic deformation, which accompanies martensite accommodation in shape memory alloys. Damage of a shape memory specimen has been calculated for two regimes of loading: a constant stress and cyclic variation of temperature across the interval of martensitic transformations, and at a constant temperature corresponding to the pseudoelastic state and cyclic variation of stress. The obtained results are in a good qualitative agreement with available experimental data.