Martensitic transformation (MT) plays a critical role in determining both mechanical and functional properties of shape memory alloys (SMAs). The behavior of MT depends strongly on the microstructure of materials, and two- or multiple-stage MTs are typical examples of this. However, the physical origin of two- or multiple-stage MTs remains controversial although much effort has been made. In this study, a novel two-stage MT is observed in a TiNb-based SMA with nanoscale concentration modulation. The physical origin of this chemical-heterogeneity-induced two-stage MT is the difference in thermodynamic stability of the parent and martensitic phase between Nb-leaner and Nb-richer regions. The findings of this study not only expand the repertoire of mechanisms of two- or multiple-stage MT but also shed light on the long-standing controversy over the physical origin of multiple-stage MTs.