A stress plateau with a strain of 5–8% normally occurs during the stress-induced martensite transformation (SIM) of NiTi shape memory alloys. Within the stress plateau, the correlation between the stress and strain is lost, which limits their application in certain fields which require accurate control of inelastic deformation. In order to address this limitation, a series of step-like NiTi samples with graded cross-sectional area were designed and fabricated. Multiple stress plateaus were achieved by varying the sample width and adjusting the number of steps; for instance, two and three stress plateaus were obtained in the samples with two and three steps, respectively. Also, linear force–strain response was obtained by changing gradually the width of the samples. The functional stability of the geometrically graded samples was significantly improved by incomplete recrystallization annealing (600 °C) followed by low-temperature (250 °C) aging treatment. The incompletely recrystallized specimens contained many dislocations and grain and sub-grain boundaries, which promoted the uniform precipitation of Ni₄Ti₃ nanoparticles during aging treatment. The homogeneously and densely dispersed Ni₄Ti₃ nanoparticles were able to strengthen the matrix considerably and prevent plastic activities during stress-induced martensite transformation. As a result, the functional stability of the geometrically graded NiTi samples was much improved. After aging at 250 °C for 120 h, all the samples showed a small residual strain of <1.0% after 20 loading–unloading cycles.