Friction stir processing (FSP) was applied to 1080 carbon steel as a means to enhance the near-surface material properties. The process transformed the original pearlite microstructure to martensite, resulting in significant increase in surface hardness. This surface hardening produced a significant benefit for friction and wear behavior of the steel as measured by unidirectional sliding ball-on-flat testing. Under dry sliding, FSP reduced friction coefficient by approximately 25% and wear rate by an order of magnitude. Under oil lubrication, FSP had only a marginal effect on friction, but it reduced wear rates by a factor of 4. The improvement in tribological performance of 1080 steel by FSP technique is attributed to reduced plasticity of the near-surface material during sliding contact.