Friction stir process (FSP) is a severe plastic deformation based secondary processing technique that can be utilized to engineer novel microstructures in metallic alloys. It is well known that such techniques are cumbersome and require significant experimental work and material to determine optimum processing conditions. Therefore in this work, we propose a new two step numerical approach, where: (i) CFD simulations coupled with Zener-Holloman relation are used to predict microstructure evolution in stirred, transition and heat affected zones of friction stir processed AZ31 Mg alloy sheets, (ii) Finite element simulations are carried out to evaluate superplastic forming characteristics of different microstructures developed after FSP. Simulation trends including forming pressure profiles, dome height evolution, and thickness distribution of friction stir processed sheets are compared with those of the base material. The proposed combination of numerical approaches to model both processing and forming aspects yields a powerful tool to study and optimize processing and forming technologies with limited experimentation.