Control of multi-martensite phase transformations and physical properties constitute greatly unresolved challenges in Fe7Pd3-based ferromagnetic shape memory alloys. Single crystalline Fe7Pd3 thin films reveal an austenite to martensite phase transformation, continuously ranging from the facecentered cubic (fcc) to the face-centered tetragonal (fct) and body-centered cubic (bcc) phases upon irradiation with 1.8 MeV Kr+ ions. Within the present contribution, we explore this scenario within a comprehensive experimental study: employing atomic force microscopy (AFM) and high resolution transmission electron microscopy (HR-TEM), we first clarify the crystallography of the ionirradiation-induced austenite⇒martensite and inter-martensite transitions, explore the multivariant martensite structures with c-a twinning and unravel a very gradual transition between variants at twin boundaries. Accompanying magnetic properties, addressed locally and globally, are characterized by an increasing saturation magnetization from fcc to bcc, while coercivity and remanence are demonstrated to be governed by magnetocrystalline anisotropy and ion-irradiat ... mehrioninduced defect density, respectively. Based on reversibility of ion-irradiation-induced materials changes due to annealing treatment and a conversion electron Mößbauer spectroscopy (CEMS) study to address changes in order, a quantitative defect-based physical picture of ion-irradiation-induced austenite⇔martensite transformation in Fe7Pd3 is developed. The presented concepts thus pave the way for ion-irradiation-assisted optimization strategies for tailored functional alloys.