In the current work, multi-pass friction stir processing (FSP) was utilized to fabricate samples of fine-grained aluminum–zinc (AZ) magnesium alloy and its metal matrix composite (MMC). The microstructure and high-temperature tensile behavior of friction stir processed (FSPed) AZ31 and AZ31/SiC MMC at various strain rates in the range of 10−2 to 10−4 s−1 were investigated, and the fracture mechanisms of each condition were analyzed. The results verified that MMC samples exhibited a remarkable enhancement in microhardness. The evolution of inclined basal texture was observed after processing for both FSPed and MMC samples. The ambient temperature stress–strain response revealed that the formability of AZ31 has improved after friction stir processing, whereas high-temperature flow curves were discernibly sensitive to strain rate. Equiaxed deep dimples were detected on the fracture surfaces of FSPed samples, but decreased strain rate led to an increase in the number of dimples as attributed to the recrystallization of new grains.