A novel metallic composite coating of mechanically alloyed SS316/SS420 stainless steels was fabricated successfully via friction surfacing (FS). Its mechanical properties, wear and corrosion resistance were significantly enhanced. The FSed composite coating was primarily composed of austenite, accounting for approximately 67.8 %, which was inherited from SS316 consumable rod and contained lath martensite (32.2 %) derived from the SS420 filler rod. The grain size of the coating was refined to 2.03–3.99 μm due to the dynamic recrystallization and phase transformation during FS. Meanwhile, with the aid of plastic flow mixing and diffusion of the metallic elements (Ni, Mo and Cr) from SS316 and SS420, the diffusion zone composed of two new phases – Ni-deficient austenite and Ni-rich martensite formed, which contribute to the enhancement of comprehensive properties and minimize the galvanic effect between austenite and martensite in corrosive media. In the present study, a guideline is provided to fabricate high performance alloys in an effective, environmentally friendly and low-cost method, which has substantial application potential.