Friction stir processing (FSP) is a solid state process to modify microstructure and mechanical properties of sheet metals and as-cast materials. In this process stirring action of the tool causes the material to intense plastic deformation that yields a dynamical recrystalyzation. In this study the effect of FSP and process parameters on hardness, and microstructure of stainless steel 316L has been investigated. Also by using of FSP, a composite layer of 316L/SiC has been produced. Results show that FSP leads to a finer and homogenized grain structure, as well as increased hardness, strength, toughness, and elongation at failure of the material. The composites produced by FSP have a uniform distribution of SiC particles between the grains of the base metal.