Friction stir (FS) welded Al alloys could be used as tailor welded blanks in automotive industries. Tailor welded blanks must exhibit adequate formability similar to that of the base material sheet. To evaluate the formability of FS welds in Al alloys for car body applications, a relationship between the fracture limit strain of plane strain deformation and the microstructure was examined in an FS welded thin Al alloy 5052 sheet. The grain size of the stir zone increased with increasing heat input during FSW. FSW produced a texture component different from that of the base material in the stir zone, but all welds produced at several heat inputs had the roughly same texture component in the stir zone. The fracture limit strain of plane strain deformation increased with increasing grain size up to 10 μm, beyond which it decreased. Both OIM analysis and TEM observation showed that the stir zones, having grain sizes larger than 10 μm, contained relatively larger numbers of sub-boundaries. Consequently, the fracture limit strain of plane strain deformation increased with increasing subgrain size in the stir zone. The present study suggests that both large grain size and a low density of dislocations and sub-boundaries are required as microstructural features to obtain the excellent plane strain value in the stir zone of Al alloy 5052.