In this paper, the effect of friction stir welding (FSW) parameters on wear and deformation behavior of tungsten carbide (WC) tool employed in the welding of AISI 304 austenitic stainless steel (SS) is reported. In addition, the wear and deformation of the tool are also characterized. Three FSW parameters, namely shoulder diameter, tool rpm, and traverse speed each at three levels were considered. Experiments were performed as per Taguchi’s L9 orthogonal array to investigate the effect of these parameters on wear and plastic deformation of the tool. Wear at the pin root and bottom face of the pin attributed to diffusion and attrition mechanisms, respectively, were observed. Significant deformation of the tool was also observed during welding which caused bulging of the shoulder with an increased cone angle of the pin.