Metallic components fabricated with powder bed fusion additive manufacturing (AM) processes are known to have defects arising from liquid-solid phase transformation. Friction stirring can be an effective alternative source of heat, as evidenced in some of the recently developed powder deposition-based solid-state AM processes. However, they possess practical issues such as making compacted powder feedstock beforehand, consolidation of powder filler inside the tool during deposition followed by necessary extrusion, and significant flash formation, among a few. This paper proposed a novel powder bed friction stir (PBFS) additive manufacturing process inside a specifically designed mould that could potentially mitigate such issues in the existing technologies. The process was successfully demonstrated by building single-track and parallel double-track 3D structures layer-by-layer from an AA6061 powder bed using a rotating non-consumable friction stirring tool. Furthermore, for a better understanding of the underlying process mechanics, deposits were analyzed for their surface topography, microstructural evolution, and mechanical performance under different heat inputs as well as different print locations. Different heat inputs were applied by varying the friction-stirring pitch (FS pitch) from ‘Low’ to ‘High’. The print locations analysis was carried out in a parallel double-track fabricated at the optimal FS pitch. The results revealed that the ‘High’ FS pitch yielded an increased percentage of recrystallized grains and a fraction of high-angle grain boundaries as well as a larger average grain size due to the high heat input, better material intermixing, and the dominance of continuous dynamic recrystallization. As a result, an improved mechanical performance, except for the microhardness, was observed. The ‘High’ FS pitch also exhibited an improved surface topography. The results also revealed that the relative dominance of the re-stirring-induced recrystallization and the reheating-induced plastic deformation was the key factor for the variation of the microstructure in the longitudinal, transverse, and short-transverse directions. A gradual decrease in the tensile strength was observed from the ‘Top’ to the ‘Bottom’ segments of the overlapped region, contrary to the central region of a track.