Precipitation hardening stainless steel 17-4PH coatings were successfully deposited on the AISI 304 substrate via friction surfacing (FS) for enhancing the surface hardness. Through FS, the incoherent precipitates (Cu and CrN, 25–50 nm) originally existed in the as-received (AR) 17-4PH consumable rod (345 HV₁) were re-dissolved into the martensitic matrix of the FSed 17-4PH coatings (400 HV₁). The strain incompatibility caused by severe plastic deformation (SPD) in FS induced the formation of Cr-rich (Ni and Cu-depleted) δ-ferrite (1.8–2.7%) along the plastic flow direction with stress concentration. The shear deformation and dynamic recrystallization (DRX), as evidenced by the⁻J shearing and RTc’ recrystallization components in the FSed coatings, refined the grain size of the prior austenite. Increase in hardness of the FSed coatings was mainly attributed to the high dislocation density introduced by SPD. There was 4.8% acicular reversed austenite formed displacively, which possessed Kurdjumov-Sachs (K-S) relationship with surrounding martensite in the AR 17-4PH rod after solutionized treatment (ST) and aging (H900). The hardness of the AR 17-4PH after H900 was increased (439 HV₁) because of the increment of dislocation density and micro-strain in the martensitic matrix introduced by the early-stage precipitation of coherent Cu. Owing to existence of δ-ferrite in the FSed coatings, some globular reversed austenite formed diffusively besides acicular ones after H900. There was more austenite (9.2%) in the FSed coating after H900 (456 HV₁). The globular reversed austenite, which nucleated on the shear deformed martensitic grains in the FSed coatings, possessed {110}_fcc//{120}_bcc with adjacent δ-ferrite. SPD-induced dislocations in the FSed coating were annihilated during H900 leading to decrease in hardness but compensated by the precipitation hardening of coherent Cu. After FS, the micro-scale MnS and NbP₂S₈ inclusions in the AR 17-4PH were broken into nano-sized fragments which were dissolved into martensitic matrix during H900.