Compositional instability and phase formation in Ni-Fe-Ga Heusler alloys are investigated. The alloys are synthesized into two-phase microstructure. Their structures are identified as fcc and L21, respectively. The γ-phase formation could be suppressed with higher Ga-content in the alloy as Ga stabilizes austenite phase, but Ga lowers the martensite transformation temperature. The increase of Fe content improves the magnetization value and the increase of Ni from 52 to 55 at. pct raises the martensite transformation temperature from 216 K to 357 K (−57 °C to 84 °C). Magnetic properties and martensitic transformation behavior in Ni-Fe-Ga Heusler alloys follow opposite trends, while Ni replaces either Fe or Ga, whereas they follow similar trends, while Fe replaces Ga. Modulated martensite structure has low twinning stress and high magneto crystalline anisotropic properties. Thus, the observation of 10- and 14 M-modulated martensite structures in the studied Ni-Fe-Ga Heusler alloys is beneficial for shape memory applications. The interdependency of alloy composition, phase formation, magnetic properties, and martensite transformation are discussed.