In the present work, ceramics-metal functionally graded materials (FGM) with improved mechanical properties compared to monolithic materials was designed and fabricated using powder metallurgy approach. The microstructure of the FGM has shown uniform transition of the two materials system. Mechanical properties of the FGM such as fracture energy and flexural strength were characterized. Toughening effect of the layered system was also studied and crack deflection mechanism is reckoned to be the operating mechanism for enhanced mechanical properties. The experimental studies are also shown to be consistent with the experimental findings. It is hence shown that FGM could provide a superior material system for many advanced applications.