The rate of heat generation and plastic deformation of materials should be precisely controlled in order to get a strong and sound weld joint during dissimilar friction stir lap welding (FSLW) of aluminium and steel. The effect interfacial microstructure at the weld joint interface on mechanical properties is elucidated in the present investigation with the help of detailed microstructure evaluation in FSLW of AA6061 and mild steel (MS). The results indicated a substantial variation in interfacial structure from formation of a bi-metallic straight interface, intercalated structure to mechanically mixed zone (MMZ) with the increase in tool rotation speed from 300 rpm to 1700 rpm. In addition, significant differences in the microstructure evolution mechanisms were noticed from the AA6061 side to MS side through the interfacial microstructure. The variation in interfacial structure and corresponding change in the fracture location predominantly affected the mechanical properties of the joints at different tool rotation speeds. The fracture locations in MMZ and intercalated structure showed the highest and lowest lap shear strengths, respectively. © 2020 Elsevier Inc.