Martensitic transition is a solid-state phase transition involving cooperative movement of atoms, mostly studied in metallurgy. The main characteristics are low transition barrier, ultrafast kinetics, and structural reversibility. They are rarely observed in molecular crystals, hence the origin and mechanism are largely unexplored. Here we report the discovery of martensitic transition in single crystals of two different organic semiconductors. In situ microscopy, single crystal X-ray diffraction, Raman and NMR spectroscopy and molecular simulations combined indicate that the rotating bulky side chains trigger cooperative transition, giving rise to a macroscopic, highly reversible shape memory effect. Such cooperative transition is preserved from single crystals to thin films and enables function memory effect in thin film transistor devices for the first time. By observing martensitic behavior in two systems containing bulky side chains, we establish a new molecular design rule to trigger martensitic transition and shape/function memory effect in molecular crystals. Inducing martensitic transition in organic electronic systems may find use in designing next-generation smart multifunctional materials.