A new generation of thin film shape memory alloy (SMA) for MEMS micro-actuator has been developed, in which film structure and chemistry are optimized, for enhanced higher transition temperature, higher strain recovery rate as well as reduced actuation time by improving the heat transfer rates. Thin film TiPdNi was produced using Ion Beam Assisted Deposition (IBAD) technique both by in-situ heat treating during deposition and followed by post processing heat treatment. Films deposited on unheated substrates were found to be highly amorphous with minimal B2 austenite crystallization, while films deposited on heated substrates produced a highly crystallized twinned B19 martensitic structure through the bulk of the film. For films deposited on heated substrates, a 70 nm thick transition layer was found to exist between the bulk film and silicon substrate. Severe delamination and oxidation as a result of post heat treatment on IBAD deposited samples made in-situ heat treatment most suitable for processing thin film SMAs for MEMS applications. The desire to introduce this innovative technology to the field of SMA micro-actuators is based on two primary advantages of IBAD process over existing technology used to apply thin film SMAs. First, the chemical composition and grain size of the applied coating can be precisely controlled over a wide range of values. Second, the SMA can be deposited as thin films ≤ 2 μm thick with smaller grain size, much denser than films applied using sputter deposition technology. The effects of various processing parameters, and post processing heat treatment, on properties of the thin film SMA were studied.