The transformation and deformation behavior of a polycrystalline shape memory alloy is modeled and simulated based on the inclusion method. The martensitic transformation condition is defined with taking into account the interaction energy among single crystal grains. In this study, the interaction energy is assumed to be calculated from the change in elastic strain energy due to the mismatch strain induced by the martensitic transformation. The inclusion method with cuboidal inclusion is employed to calculate the elastic strain field. Some numerical calculation are shown to explain the effect of the internal stress state on the transformation behavior.