The aim of the study was to improve the mechanical, biodegradation and in vitro biocompatible characteristics of as received rolled AZ31 (Mg-1%Zn-3%Al) alloy by develop the surface composite of Mg-Titania. The surface composite was developed by friction stir processing (FSP) and it’s used for prosthetic applications. The influence of tool rotation speed and number of FSP passes on grain structure, grain refinement, tensile strength, hardness, in vitro degradation rate and in vitro biocompatibility were explored. The obtained results support the capability of FSP in terms of mechanical strengthening, refinement of grain structure, dispersion of reinforcement (i.e. TiO2) and controlled degradation rate. Grain structure at stir zone, advancing side and retreating side were investigated. The large grains in the alloy were reduced to a fine equiaxial grains of average dimension of ≈ 3 μm by 3rd pass of FSP. The process was performed under two different tool rotation speed, i.e. 1550 and 2260 RPM. The addition of second phase in the matrix significantly improve the grain refinement. The results obtained from tensile test revealed the improvement in the percentage elongation without compromising the strength. The micro hardness of specimens of different parametric combination were evaluated and found ≈ 30–50% improvement in the micro hardness. The degradation rate by immersion test in simulated body fluid (SBF) for 3, 6 and 10 days were performed and found a significant reduction in degradation rate. The MTT assay for the biocompatibility performed by indirect method, the results validate the non-toxic behavior of processed specimen.