To analyze the mechanical property and the residual stress in functionally gradient materials(FGMs), disctype TZP/Ni-and TZP/SUS304-FGM were hot pressed using powder metallurgy compared with directly bonded materials which were fabricated by the same method. The continuous interface and the microstructure of FGMs were characterized by EPMA, WDS, optical microscope and SEM. By fractography, the fracture behavior of FGMs was mainly influenced by the defects which originated from the fabrication process. And the defectlike cracks in the FGMs induced by the residual stress have been shown to cause failure. This fact has well corresponded to the analysis of the residual stress distribution by Finite Element Method (FEM). The residual stress generated on the interface (between each layer, and matrix and second phase, respectively) were dominantly influenced on the sintering temperature and the material constants. As a consequence, the interfacial stability and the relaxation of residual stress could be obtained through compositional gradient.