We predict the existence of a ferromagnetic shape memory alloy Ga2MnNi using density-functional theory. The martensitic start temperature (TM) is found to be approximately proportional to the stabilization energy of the martensitic phase (δEtot) for different shape memory alloys. Experimental studies performed to verify the theoretical results show that Ga2MnNi is ferromagnetic at room temperature and TM and TC are 780 and 330 K, respectively. Both from theory and experiment, the martensitic transition is found to be volume conserving that is indicative of shape memory behavior. ©2008 The American Physical Society.