The age-hardening behavior of Fe−25.3Ni−1.7 Ti (wt pct) alloy both in undeformed specimens and in specimens cold deformed by 10 or 20 pct prior to aging was studied. The microstructural changes during aging were observed using transmission electron microscopy (TEM) and atom probe analysis and there were related to the mechanical properties as measured by microhardness and shear punch testing. An excellent combination of hardness, strength, and ductility was achieved after only 5 seconds aging at 550°C. We propose that this rapid strengthening is due to a dislocation friction effect arising from the formation of a fine dispersion of Ni−Ti atomic co-clusters during this short aging time. The concomitant effects of a reverse transformation of martensite to austenite during aging and a gradual increase in both size of the clusters and distance between them contributed to a decrease in strength after aging for 15 seconds. This decline proceeded until aging for 300 seconds and was followed by a secondary hardening reaction toward peak hardness (at 10,800 seconds) and subsequent overaging. This secondary hardening was associated with fine-scale precipitation of Ni3Ti and this process was accelerated by deformation prior to aging, leading to a reduction or elimination of hardness decline after the initial cluster hardening.