Friction stir processing (FSP) is a novel solid state technique to refine the microstructure of metallic materials. The objective of this work is to apply FSP to change the morphology and distribution of intermetallic particles and achieve property enhancement. AA6061/8wt. % Al3Zr composite was produced by the in situ reaction of molten aluminum and inorganic salt K2ZrF6. Optical and scanning electron micrographs revealed a uniform distribution of needle shape Al3Zr particles in the aluminum matrix. The Al3Zr particles were located in the inter granular spaces. A double pass FSP was carried out using a tool rotational speed of 1200 rpm, processing speed of 50 mm/min and axial force of 8 kN. A tool made of HCHCr steel; oil hardened to 62 HRC, having a hexagonal profile was used. The needle shape Al3Zr particles were fragmented and converted into a spherical shape subsequent to FSP which resulted an increase in the hardness of the composite.