The primary focus of this study is the application of friction stir processing to produce surface composites of in situ AA5083-H111/Al–Fe. These composites were fabricated by mixing mechanically alloyed Fe–40 wt% Al powder for 40 h. The AA5083 substrate underwent a two-pass friction stir processing with changes in the tool’s movement direction during fabrication. This experiment used Taguchi’s L9 orthogonal array design to gather and analyse data efficiently. Following each friction stir processing pass, the fabricated aluminium metal matrix composite microstructure, hardness and ultimate tensile strength were conducted. In this study, the maximum tensile strength of 225.8 MPa after the first pass and 253.6 MPa after the second pass. Additionally, microhardness measurements indicated values of 123.3 and 128.3 Hv after the first and second passes, respectively. These impressive mechanical properties were achieved by optimizing specific process parameters, including a tool shoulder diameter of 21 mm, a tool rotational speed of 900 rpm, a tool traverse speed of 63 mm/min and a tilt angle of 1.5°. Furthermore, examining the fracture surface of the friction stir processed sample revealed ductile failure behaviour, suggesting that the material experienced deformation and stretching before fracture. This observation aligns with the inherent ductile nature of the AA5083/Al–Fe composite.