<p>Fusion-based composite manufacturing faces challenges such as hot cracking, distortion, metallurgical incompatibility, and brittle intermetallic formation due to liquid–solid phase transformations. In contrast, friction stir additive manufacturing (FSAM) is an emerging solid-state additive manufacturing process that eliminates these issues by avoiding melting. A specially designed cylindrical tool generates frictional heat due to thermo-mechanical stirring action. The severe plastic deformation due to thermo-mechanical stirring often leads to an equiaxed, homogeneous, and refined microstructure, which in turn results in improved mechanical properties. This review paper discusses different types of FSAM processes and correlations that exist between the process parameters, microstructural characteristics, and mechanical performance. Factors like rotational speed (<i>ω</i>), translational speed (<i>V</i>), feed rate (<i>F</i>), and tool geometry do exert an influence on microstructural evolution. The recently developed friction stir powder additive manufacturing is elaborately discussed as it is gaining traction among researchers and industries. The friction-based additive manufacturing has the potential to become a viable alternative to fusion-based additive manufacturing technology. This paper also discusses the applications, challenges, and future scope of friction-based additive manufacturing processes.</p>