This paper deals for the first time with the effects of additional cooling medium by submerging underwater on the feasibility of dissimilar bond formation between aluminum and steel in solid-state during friction-stir welding (FSW) process. Sheets of AA5083 Al-Mg aluminum alloy and A441 AISI steel are considered into the investigation with a butt-joint design and immersing under the cooling water mediums with three different temperatures of 0, 25, and 50 °C besides ambient processing in the air atmosphere without excessive cooling. Thermo-mechanical cycles during the FSW process are monitored as well as the soundness of produced dissimilar weldments in terms of materials inter-mixing, grain structural features, possible phase transformations, mechanical property, and subsequent fracture behavior. The results showed that by increasing the cooling capability of the environment and employing the low-temperature water as the submerged medium, the peak temperature during the FSW process is continuously reduced down to ~ 400 °C. The impact influence is on suppressing the dissimilar metals inter-mixing as well as the grain structural coarsening during dynamic recrystallization and the kinetics of intermetallic compound (IMC) formation. By decreasing the peak temperature and submerging under cooling medium, the thickness of the IMC layer at the interface is continuously decreased as affected the indentation hardness resistance and subsequent transverse tensile behavior. All samples are failed at the joint interface along the IMC layer, with an excellent combination of tensile strength (~ 310 MPa) and elongation (~ 13%) for the room temperature cooling medium, as the optimum condition based on the evolution of experimental trends. The dominant flow mechanism as plastic constraint induced some fractural aspects of ductile in dimpler form or catastrophic on the corresponding failed portion depending on the joint brittleness.