A titanium matrix surface nanocomposite with uniformly distributed nanodiamonds was developed using friction stir process for the first time. A dual phase (α+β) microstructure containing ultrafine equiaxed grains was formed within the matrix after three passes. The mean grain sizes were measured to be 0.7 and 0.9 μm for α and β phase, respectively. The stabilization of the β phase at room temperature was discussed, relying on post-processing cooling rate and the diffusion of W elements from the tool to the matrix. The processed nanocomposite exhibited a microhardness value of 618 Hv in the stir zone, which is 4 and 2.6 times to the initial material and pure Ti processed (without nanodiamonds), respectively. Upon friction stir processing of pure titanium (without nanodiamonds), an ultrafine-grained structure with an average size of 2.4 μm was produced, which led to an increase in microhardness up to 238 Hv. Based on conducted tribological evaluations, the processed surface nanocomposite exhibited a significant decrease in friction coefficient and wear weight loss. The results indicated a 47% decrease in friction coefficient and a 75% reduction in wear weight loss compared to the initial material. The investigation of worn surfaces implied that the wear mechanism was altered from delamination in initial pure Ti to abrasive wear in the Ti/NDs processed nanocomposite. Corrosion testing, including electrochemical impedance spectroscopy and potentiodynamic polarization techniques, revealed that Ti/NDs nanocomposite processing mitigated the material corrosion resistance, which were ascribed to the developed ultrafine grained structure as well as NDs nanoclusters to galvanic corrosion activation.