The microstructure, magnetic and mechanical properties of the annealed at 1430 K Ni50Mn25Ga20Gd5 (at.%) magnetic shape memory alloy were studied. The Ni50Mn25Ga20Gd5 ingot was prepared in a bulk form by arc-melting method. Scanning electron microscopy supported by atomic force microscopy investigations confirmed a dual-phase microstructure of the studied alloy characterized by Gd-poor and Gd-rich phases. Temperature dependence of magnetic magnetization M(T) measured at high (µ0H = 2 T) and low (µ0H = 0.25 T) value of external magnetic fields revealed that the fabricated material undergoes reversible martensitic transition close to the room temperature. The Curie temperature for the investigated material calculated from the M(T) curve measured in zero-field cooled mode is 377 K. Mechanical properties of the Ni50Mn25Ga20Gd5 alloy investigated by the means of a series of nanoindentation tests allowed to separate hardness for the Gd-poor (435 HV) and Gd-rich (562 HV) phase.