Shape memory polymers are widely used in industrial applications. Despite extensive and continuous research studies, it is still a great challenge to improve the mechanical properties without affecting their shape memory properties. One approach to improving them is to seek inspiration from natural materials that exhibit superior performance and provide an infinite source of design guidelines. Inspired by the hierarchical architecture of nacre, we have prepared nacre-like shape memory epoxy-graphene composites via freeze-casting, a technique to create lamellar materials with complex hierarchical microstructures. Perpendicular to the lamellar direction, the fracture toughness of our composites is ∼2.5 times that of the epoxy matrix, due to the synergy of extrinsic toughening mechanisms combining crack deflection, crack branching, crack bridging, and friction between the layered platelets. We achieved high damage-tolerance in our composites by having some degree of plasticity to relax stresses in an epoxy layer. The shape memory properties can be activated using external heating. Due to the electrical conductivity of graphene, we have also achieved electro-active shape memory composites. Our approach suggests an avenue for producing bioinspired shape memory composites with good mechanical and multi-functional properties by utilizing the design principles and strengthening/toughening mechanisms active in nacre and other biological materials.