Abstract In the present study, 3mm-thick plates of 304 stainless steel and st37 steel were welded together by friction stir welding at a welding speed of 50mm/min and tool rotational speed of 400 and 800rpm. X-ray diffraction test was carried out to study the phases which might be formed in the welds. Metallographic examinations, and tensile and microhardness tests were used to analyze the microstructure and mechanical properties of the joint. Four different zones were found in the weld area except the base metals. In the stir zone of the 304 stainless steel, a refined grain structure with some features of dynamic recrystallization was evidenced. A thermomechanically-affected zone was characterized on the 304 steel side with features of dynamic recovery. In the other side of the stir zone, the hot deformation of the st37 steel in the austenite region produced small austenite grains and these grains transformed to fine ferrite and pearlite and some products of displacive transformations such as Widmanstatten ferrite and martensite by cooling the material after friction stir welding. The heat-affected zone in the st37 steel side showed partially and fully refined microstructures like fusion welding processes. The recrystallization in the 304 steel and the transformations in the st37 steel enhanced the hardness of the weld area and therefore, improved the tensile properties of the joint.