The aluminum alloy AA5083 is a technologically important structural alloy as it is lightweight, with outstanding weldability and formability, moderate corrosion resistance and strength, making it suitable for a wide range of marine and transportation applications. In the present study, AA5083/nano-gamma Al2O3 composite metal foam was fabricated using a friction stir processing route (FSP). More precisely, the paper presents a first attempt to use grooves for the integration of the foaming and stabilizing agent on the metal foam precursor by FSP. The implementation of grooves allows to control the amount of foaming, integrates the stabilizing particles within the precursor and permits the production of localized metal foams. Unlike the commonly used manufacturing processes, only one plate is required for the production of the precursor sample in the proposed process. Therefore, this process can be easily implemented in the industrial sector. Furthermore, gamma-Al2O3 nanostructured reinforcement, which is characterized by increased interfacial energy, was utilized as a stabilizing agent. The precursor specimens were manufactured by mixing blowing agent powder (0.4% w/w TiH2) and stabilization agent nanopowder (2% w/w gamma-Al2O3) into the 5083 aluminum alloy matrix using FSP. The effects of the number of FSP passes and the foaming conditions (holding temperature and time) on the pore density, morphology and distribution were investigated. The microstructure and porosity evolution of the so-obtained metal foam was also examined and analyzed. Results indicate that, following the foaming procedure, a porosity of 60% and an equivalent pore diameter ranging from 0.2 to 3.3 mm can be achieved. Moreover, the microstructure was found to be closely related to microhardness distribution perpendicular to the traversing direction of the FSP tool for both precursor and foamed specimens.