NiTi alloys are extensively used in various industrial applications. However, to enhance the performance of this alloy in applications, its mechanical properties should be improved. In previous research, the effect of addition of ceramic microparticles on the mechanical properties of a NiTi matrix has been explored. In this study, to improve the mechanical properties of NiTi, small fractions of alumina nanoparticles were used as reinforcement. The compressive stress-strain curves of the NiTi and NiTi-2Al₂O₃ samples demonstrated well-known four-stage behavior with double yielding. Moreover, it was found that the addition of 2 wt% alumina nanoparticles enhanced the elastic modulus, shortened the first plateau region, and reduced the fracture strain, compared to the unreinforced NiTi sample. Increasing alumina nanoparticle contents to 6 wt% completely changed the mechanical behavior of this composite: considerable elasticity, followed by a short plateau region, and fracture. The high resolution transmission electron microscopy images showed that, a high fraction of dislocations in the vicinity of nanoparticles can be generated in NiTi, which seems to lock the matrix in the NiTi-6Al₂O₃ sample. Fracture surface analysis using scanning electron microscopy showed dimple features in the NiTi and NiTi-2Al₂O₃ samples and a smooth and brittle appearance in the NiTi-6Al₂O₃ sample.