Submerged friction stir processing (SFSP), that is, the entire process was carried out underwater, was successfully conducted on low carbon steel. The microstructure, electrochemical corrosion, and salt fog corrosion properties of SFSP low carbon steel were investigated. The results indicated that phase transformation and dynamic recrystallization occurred during SFSP and finally resulted in a dual phase fine grain microstructure in the processed zone (PZ), which consisted of ferrite and homogenous martensite phase. The grain size of ferrite was refined to 5.7 µm, and the width of martensite phase was 650 nm, respectively. In addition to changing the microstructure of low carbon steel, SFSP could also affect its corrosion property. SFSP samples exhibited better resistance against electrochemical corrosion and salt fog corrosion than BM samples. The reason was that, grain refinement and martensite formation induced by SFSP were conducive to forming dense protective layer, which effectively hindered the electrochemical corrosion and salt fog corrosion of the SFSP low carbon steel.