Grain size refinement by severe surface plastic deformation is one way of improving the surface properties. This paper describes the microstructural evolution due to severe surface plastic deformation by oil jet peening in aluminium alloy, AA6063-T6. Detail characterization of the treated surfaces using X-ray diffraction analysis and transmission electron microscopy revealed the formation of submicron size grains at and near the surface. The nozzle-traveling velocity decides the peening intensity and coverage and affects the surface properties. The specimen peened at low nozzle-traveling velocity exhibited an ultrafine grain size (∼210. nm) with high surface hardness (∼0.88. GPa), compressive residual stress (-102 ± 7. MPa) and dislocation density. The hardness is high at the surface and the depth of hardened layer is ∼400μm. Formation of high-density dislocations and associated grain refinement resulted in increased surface hardness. Presence of surface modified layer will be beneficial in improving the fatigue and tribo behavior. © 2010 Elsevier Ltd.