Unless you're using Box2D's debug draw, I don't think the lag is caused by Box2D. How is the screen being drawn? Do you move sprites around, or is it being redrawn every frame? What is the scale mode of the stage?
To check if it's Box2D's fault, you should use flash.utils.getTimer() before and after the world.Step(), get the difference between the values, and trace it. Something like this:
var beforeStep:int = flash.utils.getTimer(); //this is in milliseconds
trace("step duration: " + (flash.utils.getTimer() - beforeStep));
If the traced time is higher than your fixed time step that you use to update the world, then it may be a problem that's related to the physics side of Box2D (the bodies, the fixtures, the collisions, or something). If you're using Box2D's debug draw, you should try to do the same thing as above and see if the drawing takes a long time.