This study intends to investigate the weldability and mechanical characteristics of butt weld joints by LAFSW for dissimilar materials (Al6061-T6 and SS400). At optimum welding conditions, the tensile strength of dissimilar materials joints made by FSW is found to be lower than that of LAFSW. Due to the increase in plastic flow and formation of finer recrystallized grains at the TMAZ and SZ by laser preheating in LAFSW, the hardness in LAFSW appeared to be higher than that of FSW. Compared with FSW, finer grain size is observed and elongated grains in parent metal are deformed in the same direction around the nugget zone in TMAZ of Al6061-T6 by LAFSW. Whereas, at weld nugget zone, coarse grain size is appeared in LAFSW compared to FSW, which is owing to more plastic flow due to laser preheating effect. In dissimilar materials joints by LAFSW, ductile mode of fracture is found to occur at Al6061 side with fewer brittle particles. Mixed mode of cleavage area and ductile fracture is observed at SS400 side.