In this research, one solid state processing technique, friction stir processing, is applied to modify the AZ61 magnesium alloy billet. The FSP modified AZ61 alloy could be refined to 3-8 μm via the dynamic recrystallization during processing. The AZ61 magnesium alloy billet with 75μm grain size could be refined to about 7.5μm by four-pass friction stir processing. The hardness of the stirred zone could increase to around 70-80 after friction stir processing, and after a further compressive strain of about 3% could raise the hardness to 81. The ductility of the weld direction specimens of the modified alloy could have a 235% elongation at 300°C and 1x10-4 s-1. The grain boundary sliding (GBS) might be the dominant deformation mechanism during superplastic deformation.