The crystal structure and transformation path from austenite to 10M martensite in Ni–Mn–Ga single crystal are examined employing high-energy synchrotron radiation, scanning, and transmission electron microscopy. Using temperature gradient, an austenite/twinned martensite interface is stabilized revealing the crystal structure and microstructure of both phases and the transformation sequence across the interface. Depending on the distance from the interface, three distinct types of martensite crystal lattice, namely simple tetragonal and two monoclinic modulated ones, that is, 10M′ and 10M are confirmed. In situ measurements show that lattice mismatch formed at the habit plane is compensated by the formation of micro-twinned and branched martensite along with an elastic change in lattice parameters. It is shown that the characteristics for periodic shuffling twin boundaries, such as modulation twins or inverted stacking faults, are installed in later stages of transformation. In other words, large microstructure elements that most efficiently accommodate the strain are installed first, and then smaller elements are operable. Overall, the experimental results show that the crystal lattice does not adapt modulated phase at the habit plane and cannot be built up from simple non-modulated tetragonal blocks but rather a specific sequence of phase transformations using shear/shuffling deformation takes place.