Aluminium matrix composites are one of the most important classes of materials and have become a major focus of attention in aerospace, aeronautical, defense, and automotive industries. Aluminium matrix composites when compared to conventional alloys offer various promising properties like excellent strength-to-weight ratio, higher stiffness, lower coefficient of thermal expansion, better dimensional stability, and tribological behavior. The properties of aluminium matrix composites are highly influenced by the appropriate selection of metal matrix, processing routes, and reinforcement. Various ceramic particles (oxides, carbides, nitrides, borides, etc.) are used as reinforcements for aluminium matrix composites. Significantly different properties may be obtained using various reinforced particles and matrix material, which makes it difficult for the traditional fusion welding techniques to meet the joining requirements of these composites and is restricted to certain grades of materials. Solid-state welding process offers greater advantages over the conventional fusion welding. As a solid-state joining process, friction stir welding has proven to be a better and promising technique for joining aluminium matrix composites. However, it is still subjected to various challenges to join aluminium matrix composites even with considerable progress has been made in recent years. The current review provides an overview of state-of-the-art of friction stir welding of aluminium matrix composite materials. Specific attention and critical assessment have been given to weldability, the macrostructure and microstructure of aluminium matrix composite joints, mechanical properties of joints, fractography, and the wear of friction stir welding tool during welding of aluminium matrix composite. Furthermore, the various existing challenges of friction stir welding of aluminium matrix composites are summarized and the recommendations for future research are proposed.