The use of Additive Manufacturing (AM) enables the fabrication of geometrically complex components by accurately depositing materials in a controlled way. Technological progress in AM hardware, software, as well as the opening of new markets demand for higher flexibility and greater efficiency in today’s products, encouraging research into novel materials with functionally graded and high-performance capabilities. This has been termed as Functionally Graded Additive Manufacturing (FGAM), a layer-by-layer fabrication technique that involves gradationally varying the ratio of the material organization within a component to meet an intended function. As research in this field has gained worldwide interest, the interpretations of the FGAM concept requires greater clarification. The objective of this document is to present a conceptual understanding of FGAM. The current-state of art and capabilities of FGAM technology will be reviewed alongside with its challenging technological obstacles and limitations. Here, data exchange formats and some of the recent application is evaluated, followed with recommendations on possible strategies in overcoming barriers and future directions for FGAM to take off.