This study examines the impact of Friction Stir Processing (FSP) with TiO2 nanoparticle incorporation on the microstructural, mechanical, and tribological properties of AA5083 Metal Matrix Composites (MMCs). It offers a detailed analysis of the alterations in the alloy’s characteristics due to FSP. Microstructural examination was conducted using optical microscopy (OM) and scanning electron microscopy (SEM). Significant findings include the microstructural refinement where TiO2 nanoparticle addition during FSP shrank the grain size from 20 to 3 µm after one pass, which then rose to 7 µm following four passes. Mechanical properties, specifically microhardness and tensile strength, were assessed. Results indicated that after four FSP passes, the material can reach a yield strength of 192 MPa and an ultimate tensile strength (UTS) of 359 MPa, alongside a consistent microhardness of 103 HV0.1. Furthermore, it was observed that increasing FSP passes enhances energy absorption, although it remains lower than that of the base material. Analysis of fracture and wear mechanisms has led to the conclusion that with more passes, fracture mechanisms transition to a mix of ductile and brittle behaviors, and the friction coefficient decreases by up to 22.95%.