Magnesium (Mg) alloys have been extensively used in various fields, such as aerospace, automobile, electronics, and biomedical industries, due to their high specific strength and stiffness, excellent vibration absorption, electromagnetic shielding effect, good machinability, and recyclability. Friction stir processing (FSP) is a severe plastic deformation technique, based on the principle of friction stir welding. In addition to introducing the basic principle and advantages of FSP, this paper reviews the studies of FSP in the modification of the cast structure, superplastic deformation behavior, preparation of finegrained Mg alloys and Mg-based surface composites, and additive manufacturing. FSP not only refines, homogenizes, and densifies the microstructure, but also eliminates the cast microstructure defects, breaks up the brittle and network-like phases, and prepares fine-grained, ultrafine-, and nano-grained Mg alloys. Indeed, FSP significantly improves the comprehensive mechanical properties of the alloys and achieves low-temperature and/or high strain rate superplasticity. Furthermore, FSP can produce particle-and fiber-reinforced Mg-based surface composites. As a promising additive manufacturing technique of light metals, FSP enables the additive manufacturing of Mg alloys. Finally, we prospect the future research direction and application with friction stir processed Mg alloys.