Functionally Graded materials (FGM) are multifunctional materials which are used to produce components that require functional performance which is variable within the component and this functional performance is achieved bymanipulating the composition either atmicrometer level or at nanolevel. This is basically termed as engineering the transition inmicro/nanostructure. This in fact enhances the overall performance of the component. These materials are currently in the forefront of material research. Numerous techniques have been proposed in the last two decades and practically exercised for manufacturing of FGMs. This article presents a comprehensive deliberation of powder based manufacturing techniques which have been employed by the researchers throughout the globe for successful fabrication of an FGM. Attempt is made to throw light on practical applications of FGMand on fewimportant issueswhile attempting for FGM synthesis. The work reviewed in this paper is mostly confined to the significant powder based manufacturing techniques, application areas and elementary issues, addressed with regard to FGM synthesis in the last ten years. Earlier articles are omitted unless their inclusion is necessary for the understanding of the subject. Effort is made to discuss various significant metal/ceramic combinations used for FGM synthesis.