Chip formation ability and chip characteristics during machining in as-cast as well as friction stir processed hypereutectic Al-Si alloy are investigated. The effect of microstructural refinement by friction stir processing on chip size, shape and morphology are characterized using optical microscopy and scanning electron microscopy techniques. It was observed that with the increase in number of FSP passes morphology of chips transformed from an irregular brittle powder to regular curly ductile chips with the corresponding decrease in the surface roughness values, thus enhancing the machinability. The change of chip behavior in cast and that after FSP was primarily due to the reduction in diameter and uniform redistribution of primary silicon. © 2016 The Society of Manufacturing Engineers.