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The discovery of functional gradients introduce a new perspective in understanding the cortical spectrum of intrinsic dynamics, as it captures major axes of functional connectivity in low-dimensional space. However, how functional gradients arise and dynamically vary remains poorly understood. In this study, we investigated the biological basis of functional gradients using awake resting-state fMRI, retrograde tracing and gene expression datasets in marmosets. We found functional gradients in marmosets showed a sensorimotor-to-visual principal gradient followed by a unimodal-to-multimodal gradient, resembling functional gradients in human children. Although strongly constrained by structural wirings, functional gradients were dynamically modulated by arousal levels. Utilizing a reduced model, we uncovered opposing effects on gradient dynamics by structural connectivity (inverted U-shape) and neuromodulatory input (U-shape) with arousal fluctuations, and dissected the contribution of individual neuromodulatory receptors. This study provides insights into biological basis of functional gradients by revealing the interaction between structural connectivity and ascending neuromodulatory system.