A mesoscopic continuum thermomechanical approach is applied to the problem of strain-induced martensitic transformation at shear-band intersection. A computed transformation work functional combined with a critical driving force criterion and stability analysis are employed in the solution of boundary-value problems addressing aspects of martensitic transformations in a heterogeneous plastically deforming medium. Under boundary displacement control, solutions demonstrate preferred transformation at shear-band intersections, restricted growth beyond intersections, preferred transformation during rather than after intersection process, and sequential rather than simultaneous operation of multiple intersections of identical potency. Further growth beyond intersections is favored under fixed stress boundary conditions. Mesoscopic thermomechanical considerations offer useful insights into transformation behavior in a plastic environment.