Friction stir diffusion bonding (FSDB); a derived process from friction stir lap welding, was used in this investigation to produce a solid-state lap joint between magnesium alloy ZK 60-T5 and steel ASTM A 516-70. In FSDB, a conventional friction stir welding tool was used where the tool pin did not penetrate the substrate. The developed heat due to friction and forging forces exerted by the tool facilitated the diffusion process between the lapped sheets. In this work, the effects of process conditions on fabricated joints strength and microstructural changes were studied. The design of the experiment was developed based on Taguchi L9 to study four variables; i.e. tool rotational, and welding speeds, tool pin length, and tool tilt angle, with three levels at each parameter. The developed matrix was ranked based on the impact of an individual parameter on heat input, i.e low, intermediate, and high. Tensile-shear tests were performed to study the fabricated joints’ strength. The microstructure of the developed interface between the magnesium alloy and steel was analyzed with an optical microscope, scanning electron microscopy (SEM), and energy-dispersive spectroscopy (EDS) techniques. At optimum conditions, tensile failure was found to occur in magnesium alloy; within the nugget zone, with a noticeable drop in the tensile strength as compared to the base (unprocessed) alloy.