An innovative friction stir processing variant, named Upward Friction Stir Processing (UFSP), for producing customized materials with multifunctional particles is presented. In the UFSP, an upward flow is used to disperse these functional particles in a metallic matrix, in opposition to the widely used downward flow. As a proof of concept, SiC particles were introduced and dispersed into an aluminum alloy AA7075-T651 matrix to study different process parameters and to validate this novel material processing technology. Six different small-sized ingots were produced and compared to the conventional FSP technology. The microstructural evolution is studied by means of light microscopy, eddy current testing, microhardness mapping and advanced characterization techniques, such as high-energy synchrotron X-ray diffraction, scanning electron microscopy, energy-dispersive X-ray spectroscopy and electron backscatter diffraction. The number of passes was seen to greatly impact the particle distribution. Additionally, UFSP promotes a more uniform particle distribution over a larger processed area, when the lateral tool offset progress along the retreating side.