Abstract. New smart materials have been developed in material science, that are suitable for mechatronic applications. Modern mechatronic systems are focusing on minimizing size, active control and low energy consumption. All this attributes can be incorporated into term Micro Electro Mechanical Systems (MEMS). To improve performance of MEMS system, new materials and technologies are developed -one of them, which found broad application usage is Functionally graded material (FGM). MEMS application usually contains multilayer structure and in some application class MEMS systems contain piezoelectric layers. Piezoelectric structures offer facilities to make motions. Piezoelectric layers can be also used to damp vibrations as an active damping or as an active sensor. For better understanding these multiphysical problems new mathematical models are developed. The paper deals with finite beam element with piezoelectric layers and functionally graded material of core. In the paper homogenization of FGM material properties and homogenization of core and piezoelectric layers is presented. In the process of homogenization direct integration method and multilayer method is used. There is also presented the derivation of individual submatrices of local stiffness and mass matrix, where concept of transfer constants is used. Functionality of new FGM finite beam with piezoelectric layers is presented by numerical experiments.