The objective of present work is to investigate the internal friction behavior of TiNi shape memory alloy fiber/Ni matrix composite. The TiNi fiber/Ni matrix composite was fabricated by an electroplating method using TiNi alloy fiber as the cathode and Ni plate as the anode. The internal friction as functions of temperature and strain amplitude was measured respectively. The results showed that the internal friction peaks of the TiNi/Ni matrix composites, which due to the martensitic reverse transformation of the TiNi fiber, broadened with increasing prestrain level. There was a sharp internal friction increment at the high temperature, which due to thermal expansion mismatch between the TiNi fiber and Ni matrix and recovery stress generated. Contrast to the pure TiNi alloys, the internal friction background of the TiNi/Ni composites increased with increasing temperature. Furthermore, the internal friction of the TiNi/Ni composites decreased with increasing strain amplitude measured.