Additive Friction Stir Deposition (AFSD) is an emerging solid-state metal additive manufacturing (AM) process that offers several key benefits, including high deposition rates and wrought-equivalent mechanical properties even in the as-deposited condition. The work presented is the first study to report on the development of microstructure and mechanical properties of AFSD-processed duplex stainless steel (DSS2507). The banded microstructure of the starting material was remarkably affected by AFSD processing; the austenite grains exhibited a refined and equiaxed morphology, while the ferrite grains appeared slightly larger and elongated. Microstructural observations revealed that the potential mechanism of microstructure evolution in austenite was discontinuous dynamic recrystallization (DDRX), while in ferrite, it was continuous dynamic recrystallization (CDRX). The occurrence of multiple thermal cycles during the AFSD process resulted in σ phase precipitation, which in turn led to considerable variation in mechanical properties with respect to the build direction. The top region of the as-built part with an insignificant σ phase fraction showed improved tensile strength and ductility combination compared to the as-received DSS2507 as well as other AM-processed DSS2507 alloys.