In this work, a three-dimensional crystal-plasticity-based phase-field model considering three kinds of inelastic deformation mechanisms, i.e., martensitic transformation, dislocation slip in austenite, and dislocation slip in martensite, is established to simulate the stress-assisted two-way shape memory effect (SATWSME) of NiTi single crystals and its cyclic degradation. The simulation results show that the ability of the SATWSME of NiTi single crystal increases as increasing the constant stress in the range discussed in this work (10–100 MPa), which is due to the increase of reoriented martensite formed in the cooling process due to the enhanced variant-selection capability of increased constant stress. The martensitic transformation and its reverse in the cyclic process reflecting the SATWSME show more and more obvious localization characteristics, resulting in the accumulation of significantly heterogeneous plastic deformation (mainly caused by the dislocation slip in austenite), which leads to the cyclic degradation of SATWSME. The simulation results and the conclusions drawn from this work are helpful for further understanding the mechanism of functional cyclic degradation of NiTi alloys.