The present study focuses on investigating the effect of reinforcement on the microstructure and mechanical properties of friction-stir-processed magnesium hybrid composites. The groove width (0, 0.7, 1.1, 1.7, and 2.3 mm) of the Magnesium AZ31 plates was varied by varying the volume fractions (0, 5, 10, 15, and 20 vol%) of Silicon Carbide (SiC), Titanium Carbide (TiC), and Graphite (Gr) particle reinforcements in the hybrid composite. Single-pass processing was suspended using a cylindrical tool shoulder with a rotational speed, transverse velocity, and axial pressure of 1000 rpm, 30 mm min−1, and 6 kN, respectively. The optical micrograph clearly shows that a non-cluster zone (reinforcement particles are uniformly distributed without agglomeration) was identified in the processed region of the least concentrated composites. The results revealed that a peak tensile strength of 293.546 ± 5.12 MPa was attained for the combination of 10 vol% composites, and a Vickers hardness number of 86.53 HV was achieved for the 20 vol.% composites. The fracture surface morphology was analyzed using a Scanning Electron Microscope (SEM). The mode of tensile fractography was ductile for the least composite and transformed into a brittle mode of failure with the addition of reinforcements.