Composite materials have contributed to a very large extent in solving these complex challenges. The reinforcement phase in composite materials is distributed uniformly, which results in homogenous properties. Recently the concept of functionally graded material (FGM) has arisen, where a new composite material is developed by varying the microstructure from one material to another material with a specific gradient. Functionally graded material (FGM) is a type of material whose composition is designed to change continuously within the solid. Hence it becomes a composite material with good specifications of both materials. The use of structures like beams, plates and shells, which are made from FG materials, is increasing because of smooth variation of material properties along preferred directions. This variation provides continuous stress distribution in the FG structures. Therefore an FGM can be effectively used in avoiding corrosion, fatigue, fracture and stress corrosion cracking. This paper presents a review of the recent developments in research carried out in FGMs. A detailed study of types of FGMs depending on nature of gradient is presented. Discussions are also made about the effective utilization of FGMs for sustainable development. In this regard, the focus is made in understanding the specific application of FGMs in civil engineering.