The surface microstructure and mechanical properties of Ti-6Al-4V/Ag nanocomposite processed by friction stir processing (FSP) are studied in this work. Scanning electron microscope (SEM) results show the gradient grain size of surface layer. The pile-up and tangle of dislocations and the deformation twins are observed by transmission electron microscopy (TEM). Atom probe tomography (APT) analyses reveal the presence of Ag-enriched nanoparticles in both the interiors and boundaries of α-Ti grains. Severe plastic deformation via FSP is responsible for considerable dislocations pile-up and tangle in the deformation bands. The enhancement in hardness and elastic modulus is attributed to the grain refinement and formation of much more deformation twinning. Moreover, Ag agglomeration could accelerate the recrystallization process and prevent grain coarsening, resulting in the higher hardness and the larger elastic modulus. This study confirms FSP is effective on surface modification of titanium alloys for improving the surface mechanical properties.