A finite element analysis of quasi-static, steady-state crack growth in pseudoelastic shape memory alloys is carried out for plane strain, mode I loading. The crack is assumed to propagate at a critical level of the crack-tip energy release rate. Results pertaining to the influence of forward and reverse phase transformation on the near-tip mechanical fields and fracture toughness are presented for a range of thermomechanical parameters and temperature. The fracture toughness is obtained as the ratio of the far-field applied energy release rate to the crack-tip energy release rate. A substantial fracture toughening is observed, in accordance with experimental observations, associated with the energy dissipated by the transformed material in the wake of the growing crack. Reverse phase transformation, being a dissipative process itself, is found to increase the levels of toughness enhancement. However, higher nominal temperatures tend to reduce the toughening of an SMA alloy—although the material's tendency to reverse transform in the wake of the advancing crack tip increases—due to the higher stress levels required for initiation of forward transformation.