The internal friction peak associated with the process of martensite and reverse martensite transformation in Au-Cd alloy were measured by torsion pendulum. There is a linear relation between the peak value and rate of heating. The stable peak (heating rate=0) is much higher than that of Fe-Mn alloy and the internal friction value is independent of frequency which is characteristic of static hysteresis loss. The height of the internal friction peak is related to the grain size of Martensites. There also appears a peak during the process of isothermal martensite transition According to these experimental results, we attributed this internal friction induced by martensite transition to those movable coherent interface under the action of vibrating stress.