Friction stir processing (FSP) is a solid-state treating method to enhance the mechanical properties of materials by altering their microstructure. In this study, FSP was applied to the AZ91 magnesium alloy cladding layer prepared using cold metal transition (CMT) technology, and the purpose was to investigate the effect of the traverse speed of the H13 steel stirring head under a constant rotation speed on the microstructure and mechanical properties of the cladding layer. The results demonstrated that FSP could effectively decrease the grain size of the cladding layer and lead to the dispersion and dissolution of the coarse β-Mg17Al12 second phase into the α-Mg matrix. The mechanical characteristics of the processed cladding layer were significantly enhanced compared to the unprocessed cladding layer due to the grain refinement and second-phase strengthening induced by FSP. When the stirring head rotation speed was set at 300 r/min, the average microhardness and tensile properties of the specimens showed a tendency of initially increasing and then dropping as the traverse speed increased. The cladding layer, obtained at a traverse speed of 60 mm/min, displayed optimal mechanical properties with an average microhardness, tensile strength, and elongation of 85.6 HV0.1, 278.5 MPa, and 13.4%, respectively.