Gas tungsten arc (GTA) surface modification process was used to deposit SiC particles and aluminum alloy powders on the surface of magnesium alloy AZ31. This method is an effective technique in producing a high performance composite layer. This process result notable grain refinement in the GTA surface modified composite layer. The hardness and wear resistance of the GTA surface modified composite layer are superior to that of as-received magnesium alloy AZ31. The hardness values and wear resistance of GTA surface modified composite layer depend on the GTA process parameters and the SiC particles powder concentration and distribution. The optimum processing parameters for the formation of a homogeneous crack/defect-free and grain refinement microstructure were established.