In this paper, a first successful attempt is demonstrated in using friction stir processing (FSP) for preparing bulk graphene/aluminum composites by in situ exfoliation of graphite. New insight is shed on the resulted enhancing effect and nanostructure of in situ exfoliated graphene. Compared to the FSPed base metal, the prepared composites show 15% and 13% increase in hardness and electrical conductivity respectively. It is found a large number of graphene-aluminum diphasic nano clusters embeded in both grain boundary and grain interior of the aluminum matrix, in which graphene and aluminum is bonded in a semi-coherent manner. HRTEM analysis of a partially exfoliated graphite particle indicated that few-layer graphene can be peeled off from the graphite particle owing to the severe plastic deformation during FSP. The findings in this paper opens new opportunities for fabrication of novel graphene/metal composites via in situ exfoliation of graphite during FSP.