Martensitic transformation (MT), strain glass transition (SGT) and the corresponding stress-strain responses in cold-rolled Ti_49.2Ni_50.8 shape memory alloys (SMAs) at various amounts of cold-rolling deformation are investigated. A phase diagram describing all the strain states and transitions among them is established in the temperature – deformation space. It shows a normal sharp, strong first-order B2 to B19′ MT at low deformation levels (cold-rolling thickness reduction ε_p < 27%), but a continuous B2 to B19′ SGT at high deformation levels (ε_p ≥ 27%) upon cooling. Superelasticity with small hysteresis, tunable modulus and functional-fatigue resistance properties are achieved by altering the transition behavior from MT to SGT at ε_p ≥ 27%. Nanodomains of single variant B19′ martensite at the atomic scale are observed by using aberration-corrected scanning transmission electron microscopy in samples with ε_p = 27%. Further in-situ loading synchrotron-based high energy X-ray diffraction technique shows that the quasi-linear superelasticity associated with the SGT can be attributed to stress-induced continuous growth of B19′ nanodomains. Geometrical phase analysis of high-resolution transmission electron microscopy image reveals a nanoscale network of severe lattice distortion associated with the accumulated high-density of defects at ε_p ≥ 27%, which is the microstructural origin of the B19′ strain glass state. This work provides a detailed explanation for the longstanding puzzle of unique quasi-linear superelastic response in plastically deformed TiNi SMAs, and may shed light on achieving novel mechanical properties through defect engineering.