CAD systems are routinely used by designers for creating part geometries. Interfaces to CAE/CAM systems are also commonplace enabling the FEA-based design optimization and the rapid fabrication of the designed part. However, conventional CAD systems have thus far focused on objects with homogeneous interior. Two recent advances--use of heterogeneous objects such as Functionally Graded Materials (FGM) in parts and Layered Manufacturing Technology (LMT)--have brought to the forefront the need for CAD systems to support the creation of geometry as well as the graded material inside. We first describe the need and the components of such a CAD system for heterogeneous objects. A prototype CAD system is then described with one specific example (thermal barrier type FGM, pressure vessel) in order to illustrate the use of the implemented CAD system. The implemented system is manually integrated with FEA tools for optimal design. Our ongoing work involves the automation of the integration with FEA tools.