The effect of deformation twinning on microstructure refinement was investigated for Fe-38Mn alloy during friction stir processing. It was proved that the friction stir processing microstructure of Fe-38Mn alloy was gradient distribution. The stir zone contained both recrystallized grains and fine deformed grains with average grain size of about 15 µm, and the proportion of twin boundaries in the deformed grain zone was up to 35%. Moreover, the cyclic multidirectional shear induced micro-shear bands and sub-grains with high density dislocations, as well as plentiful deformation twins. The microstructure refinement of Fe-38Mn alloy during friction stir processing resulted from the dynamic recrystallization mechanism and twinning mechanism. In addition, the cyclic multidirectional shear deformation enhanced the deformation twinning effect, so that the microstructure refinement process was completed quickly and effectively. The above works indicate a dynamic mechanism of microstructure refinement in term of the deformation twinning during friction stir processing. [Display omitted] • The SZ with average grain size of 15 μm, and the proportion of TB in the deformed grain zone was 35%. • The cyclic multidirectional shear induced micro-shear bands and plentiful deformation twins. • Deformation twinning facilitated the rapid and efficient refinement of the microstructure. [ABSTRACT FROM AUTHOR]