Powder metallurgy is versatile in fabricating the reinforced aluminum matrix composite (AMCs) by combining aluminum alloy with various nanoparticles. However, the AMCs fabricated by the powder metallurgy generally lack ductility due to processing-related factors such as undesirable microstructure, oxygen content, and porosity. In this work, the effect of multipass friction stir welding and Al2O3 nanoparticles of friction stir welded joint of AA5083 and AA6061 was investigated. The results demonstrated that multipass FSW significantly impacts the Al2O3 nanoparticles’ distribution. Furthermore, the dispersion pattern of Al2O3 nanoparticles in the stir zone strongly influenced the microstructure and mechanical properties. The tensile strength, % strain, and microhardness of the AMCs were improved after implementing multipass FSW. The improvement in the mechanical properties was observed via higher grain refinement by pinning effect and dynamic recrystallization (DRX) by Al2O3 nanoparticles.