According to the microstructure defects of laser claded nickel alloy, such as crack and nets brittle phase, the friction stir processing (FSP) method is utilized in this paper to modify microstructure defects by the coupled effect of thermal and stress of FSP. For this purpose, two key scientific problems of large deformation condition and microstructure evolution theory during FSP, are proposed in this paper. Based on this, the following issues are highlighted in this work. Firstly, obtain the friction condition of larger deformation by continuous dirved friction experiment. Secondly, study on the temperature (T), stress (σ), and strain velocity under different processing parameters via self-developed physical simulation apparatus. Thirdly, disclose the effects of T、σ、 on the microstructure evolution and then obtain the microstructure evolution equation by dynamic re-crystallization. The above work could provide theory support for the new technique of laser cladding and FSP for preparing high performance coating.