The present investigation aims to study the effect of process parameters of MAG welding (i.e. welding current, arc voltage and welding filler wire) on AISI 1018 mild steel plates considering the microstructure of base metal, heat affected zone and welded zone. CO2 is used as shielding gas. An optical microscope used for the present investigation. The microstructure of base metal of mild steel represents an equiaxed grains of ferrite (F) as the major phase and smaller grains of fine pearlite (P) as the minor constituent at 50X magnification. Base metal has lower hardness because of fine pearlite. Welding zone microstructure changes with cooling rate. A martensite structure is formed in the weldment due to very fast cooling. So the weldments have higher hardness because the formation of martensite.