Magnesium AZ91/AlN-based surface composites have been synthesized using the friction stir processing (FSP) technique. The influence of particle addition during FSP on microstructural and mechanical properties has been investigated. Composite plates of 5, 10, and 15 vol. % AlN were synthesized using two-pass FSP with an axial force of 10 KN, a tool travel speed of 40 mm/min, and a tool rotation speed of 1200 rpm. The AZ91/AlN surface composites were analyzed microscopically with the use of an optical microscope, an x-ray diffractometer, and a scanning electron microscope. The prepared composites were tested for hardness and tensile strength. Micrographs taken in the stir zone revealed a consistent distribution of AlN particles throughout the AZ91 matrix. The AZ91/AlN surface composites were tested for hardness and tensile strength, and the findings showed that the AlN particles improved the mechanical properties without significantly decreasing ductility. The fracture surfaces of the composites were studied, and the mechanisms of fracture were identified.