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Exchange bias effect observed in the Ni1.68Co0.32Mn1.20Ga0.80 alloy confirms the coexistence of antiferromagnetic and ferromagnetic phases in the martensite phase. A large inverse magnetocaloric effect has been observed within the martensitic transformation temperature range, which is originated from modified magnetic order through magnetic-field-induced phase transformation from partially antiferromagnetic martensite to ferromagnetic austenite. The magnetic entropy change is 16.2 J kg−1 K−1 at 232 K under ΔH = 60 kOe, with the net refrigerant capacity of 68 J kg−1. These properties indicate Co and Mn co-doped Ni2MnGa alloy is a multifunctional material potentially suitable for magnetic refrigeration and spintronics applications.