Friction stir processing (FSP) is an emerging grain refinement technique for magnesium alloys. In this study, a cast AZ91 alloy was processed by a single-pass FSP to achieve an average grain size of ~6 mm in the nugget zone. The FSP is found to introduce texture in the alloy due to preferred alignment of basal poles in the processing direction. The mechanical behavior is significantly influenced by texture. After FSP, the alloy was aged at different temperatures and times for continuous and discontinuous precipitation of b-Mg17Al12. A high anisotropy in yield stress is observed in the processing and transverse direction after FSP. It is shown that this anisotropy can be minimized under optimum ageing conditions. The observed yield asymmetry is correlated with the texture variation after FSP. The role of b-Mg17Al12 precipitates in reducing the yield anisotropy is also discussed.