The microstructure of non-combustible magnesium alloy, AMX602, was modified by friction stir processing (FSP) at the tool rotational speed of 800 rpm and traveling speed of 300 mm/min. In the microstructure of the as-extruded material, some intermetallic compounds (IMCs), Al2Ca and Al-Mn, inhomogeneously distributed in the matrix. The inhomogeneity was dependent on the extruding condition. The largest size of IMCs was a few tens microns. By FSP, large IMCs were broken up, and fine IMCs were uniformly dispersed in the matrix. Furthermore, grain refinement occurred due to dynamic recrystallization.