High-frequency magnetic-field-induced Martensite Reorientation (MR) is one of the most important advantages of Ferromagnetic Shape Memory Alloys (FSMAs), but its stability is threatened by dissipation heat accumulation (“self-heating”) of cyclic frictional twin boundary motion, which can cause temperature-induced Phase Transformation (PT) and reduce the output strain amplitude significantly. In this paper, the interaction of the temperature-induced PT and the magnetic-field-induced MR during high-frequency magnetic actuation on FSMA is studied with in-situ observations of local-strain evolution in conjunction with microstructure compatibility analysis. Based on the nominal strain and temperature responses and the corresponding local-strain maps, it is revealed that, when the temperature-induced PT takes place during the high-frequency field-induced MR, the specimen is divided into three zones: non-active austenite zone (with a constant deformation), active martensite zone (with cyclic deformations of MR) and buffering needle zone (interfacial zone) with a fine-needle-twin structure which plays an important role in maintaining the compatibility between austenite and martensite zones with different cyclic deformations during the dynamic loading. A novel mechanism is revealed that, under the magnetic actuation with changing ambient airflow, the “self-heating” temperature-driven phase boundary motion and the magnetic-field-driven twin boundary motion can coexist, because the specimen needs to self-organize the different phases/variants to satisfy all the thermo-magneto-mechanical boundary conditions. Taking advantage of this mechanism, the volume fractions of austenite and martensite zones can be adjusted with changing ambient airflow velocity, which provides an effective way to tune the nominal output strain amplitude (from 1% to 6% in the current study) while the working temperature is kept almost constant (around Ms and Mf).