Effect of thermal cycling(γ↔ε) on γ→ε martensitic transformation kinetics and damping capacity of Fe-17mass%Mn alloy has been studied. The amount of ε martensite increases with thermal cycling in spite of decrease in Ms temperature. The increase in ε martensite content with thermal cycling is attributable to an increase in the density of martensite nucleation sites by introduction of dislocations during thermal cycling. The γ→ε martensitic transformation kinetics shows a burst mode in the non-cycled specimen, while the kinetics exhibits a sigmoidal mode in the cycled specimens. The damping capacity of the alloy increases with increasing the ε martensite content in the non-cycled specimen. On the contrary, the damping capacity of the alloy decreases with increasing the ε martensite content in the cycled specimens. The reason is that the dislocations introduced during thermal cycling, which obstruct the movement of the damping sources, become more with thermal cycling.