This paper aims to understand the effect of friction stir butt welding on the microstructure and mechanical performance, measured in terms of hardness characteristics, transverse tensile test, and shear punch, of dissimilar weld of duplex stainless steel (DSS) and low carbon steel (LCS). The dynamic recrystallization, material intermixing, and atomic interdiffusion between DSS and LCS governed the microstructure of the stirred zone. The stirred zone was free from harmful intermetallic phases like the sigma phase. It was identified that three distinct metallurgical regions feature the stirred zone, including (i) dual-phase zone (DPZ) with an unbalanced fine duplex microstructure of austenite and ferrite, (ii) ferrite phase zone (FPZ) with fine-grained ferrite strengthened by an enhanced Ni and Cr content, (iii) martensite zone (MRZ), which was formed due to the formation of thermally unstable austenite at high temperatures due to Cr, Ni, and C interdiffusion between DPZ and FPZ. Furthermore, when LCS was positioned on the advancing side, a higher fraction of martensite was formed in the stirred zone due to the more efficient material mixing. The shear punch test indicated that the shear strength of the stirred zone in the dissimilar welds was ∼130% and ∼16% higher than that in the LCS and DSS base metals, respectively. The contributions of solid solution hardening and grain boundary hardening to the hardness/strength of the stirred zone were elucidated.