The Au–Cu–Al biocompatible shape memory alloys (SMAs) have attracted much attention due to the requirements of biomedical applications. However, brittleness remains a critical issue in the intermetallics of Au–Cu–Al alloys. In this study, to solve the dilemma of embrittlement, Ag was introduced into the Au–Cu–Al alloy to realize the ductile phase toughening (DPT) since the ductile disordered–fcc phase was predicted to precipitate in the brittle parent β phase based on the Ag–Au–Cu phase diagram. Microstructure observations, chemical composition analysis, crystal structure identifications, and thermal analysis revealed that the Au–28Cu–16Al–28Ag (mol.%) alloy was mainly composed of the Ag–rich α1 primary solidification phase with disordered–fcc structure and the eutectic structure of the α1 phase and the β phase with L21 structure. The ductile phase was successfully inserted into the brittle Au–Cu–Al intermetallic while the martensitic transformation temperature and crystal structures remained almost uninterrupted. In the cyclic loading–unloading tensile tests, the alloy mainly composed of the β phase failed in the early elastic region due to its embrittlement; while the alloy mainly composed of the α1 phase performed 29% in the total strain deformation. The Au–28Cu–16Al–28Ag alloy, which is composed of the β phase and the α1 phase, solve the issue of embrittlement; in addition, shape recovery was also found in this alloy during unloading. According to the microstructure observations, cyclic tensile tests, and fracture surface observations, the aforementioned improvement of strengthening and enhancement of ductility were brought from the insertion of the ductile α1 phase into the brittle β/β grain boundaries.