A metal matrix composite made of AZ31 containing SiC nano-particles was successfully produced by friction stir welding (FSW), and the effect of processing parameters such as rotational and transversal speeds on the microstructure (grain size) and mechanical properties (tensile and hardness tests) were investigated. Prior to friction stir welding, nano-sized SiC particles were incorporated into the joint line and then different rotational (600, 800 and 1000¿r/min) and transversal speeds (25, 75, 125 and 175¿mm/min) were tested. The results indicated that the grain size of the matrix and SiC nano-particles are two key parameters controlling different characteristics of the developed composite. Both parameters, in turns, are dependent on the heat generated during the FSW process. The increase of rotational speed and decrease of transversal speed result in high amount of heat and homogeneous distribution of SiC nano-particles. The former leads to grain growth and decrease of strength and hardness, while the latter causes grain refinement and increases of strength and hardness. Accordingly, the heat input has opposite effects on matrix grain growth and homogeneous distribution of particles. Therefore, optimum values of rotational and transversal speeds were found (800¿r/min and 75¿mm/min) to produce the best microstructure and mechanical properties.