The present study explores the feasibility of using friction stir processing to produce high-performance Mg alloy sheet. Deformation behavior of friction stir processed Mg alloys is addressed. Analyses of grain size and crystallographic texture are made to interpret the characteristics of strength and ductility of friction stir processed Mg. It is found that friction stir processing causes variation of texture orientation in the processed sheet. The non-uniform texture distribution leads to significant in-plane anisotropy in ductility as well as localized deformation behavior of the processed sheet. Furthermore, the inhomogeneity of high-intensity texture would not be eliminated by hot compression performed along the normal of the processed sheet.