Friction stir processing (FSP) is a novel solid-phase processing technique that is derived from friction stir welding (FSW). The microstructure of the base metal can be modified with the friction heat and stir function during processing. It can be used to fabricate surface composites and in situ composites by adding reinforced particles into the metal matrix via FSP. Friction stir processing can significantly improve the hardness, wear resistance, ductility, etc., while preventing defects caused by material melting. It is an ideal material processing technology and has good prospects in the field of superplastic materials and for the preparation of metal matrix composites. This paper reviews research developments into the principle, process, and applications of FSP technology as well as its future research directions and development prospects.