This thesis presents a study of the surface quality, test design for evaluating the strength of substrate/deposited material interface, and characterization of the microstructure and mechanical properties of the interface in parts manufactured via hybrid manufacturing. Hybrid manufacturing is a term that describes the combination of additive and subtractive manufacturing within the same machine. Direct energy deposition (DED) is defined as an additive manufacturing process that typically used to repair damaged components or add features to existing parts. In the surface quality study, the influence of DED process parameters such as scanning speed, step over, and laser remelting on the surface quality of 316L stainless steel are examined. Experiments are carried out at four levels of scanning speed and four levels of step over. In this work, surface quality refers to surface texture (roughness and waviness) and mechanical properties (microhardness). A profilometer is used to measure the surface roughness and waviness. Microhardness measurements are performed on the polished samples using a LECO LM247AT microhardness tester. The microstructure morphology at different regions of the deposited layer and geometry of the beads are examined using optical microscopy. The analysis of results confirmed that the variation of surface texture with process parameters depends on bead geometry, partially melted particles, and non-uniformity of bead along the deposition direction. The measurements also showed that laser remelting is an effective technique for reducing the surface roughness and waviness of DED parts In the test design study, a new testing method which is called block shear test is developed to evaluate the substrate/deposited material interfacial bonding strength. To validate the results of the block shear test of DED part, a set of specimens are manufactured, using the machining process, and thereafter the block shear test is used to evaluate the bonding strength in these specimens. The analysis of results shows that among the existing testing methods for evaluating mechanical properties such as the tensile shear test, the block shear test is demonstrated a reliable testing method for measuring the shear strength of the interface in DED parts. The results from the block shear test are compared to the standard tensile shear test theoretically and experimentally. The scanning electron microscopy is used to analyze the fracture morphology of samples after block shear and tensile shear experiments. The fractography observations showed that in block shear specimens, fracture takes place in the interface plane by shear stress while in tensile shear test specimens the combination of shear and tensile fracture is observed. In the substrate/deposited material interface study, it is demonstrated that in order to prevent the formation of porosity during DED process, a suitable range of process parameters should be selected. The formation of porosity in DED part may negatively affect the mechanical properties of the substrate/deposited material interface. No porosity was detected in the specimens, so the only factor that can influence the strength of the interface is microstructure. A detailed study on heat transfer mechanisms in the melt pool and their effects on melt pool geometry, microstructure, and mechanical properties is undertaken. The microstructural characterization of the part is examined using optical microscopy and the strength of the interface is evaluated using the block shear test. The analysis of variance (ANOVA) is employed to establish a correlation between process parameters and the strength of the interface. The analysis of the results showed that yield strength has a direct correlation with scanning speed, however, it is inversely proportional to the laser power and powder feed rate.