This paper deals with fracture process of a ceramic-metal functionally graded material (FGM) under three-point-bending. The used material was fabricated by powder metallurgy using partially stabilized zirconia (PSZ) and stainless steel (SUS 304), and has a functionally graded surface layer (FGM layer) on a SUS 304 substrate. In order to investigate the fracture process of the FGM, three-point-bending tests of rectangular specimens and numerical analysis are carried out. During the three-point-bending tests, crack initiation and unstable crack growth occur in the FGM layer, and the crack is arrested at the interface between the FGM layer and the substrate. Then, the crack branches and both crack tips grow stably along the interface with increasing deformation. After some amount of crack growth, both crack tips are arrested, and a new crack is initiated and grows into the SUS 304 substrate ahead of the initial cracking of the FGM layer. The finite element analysis taking account of gradation of material composition and plasticity of SUS 304 phase is carried out for each stage of fracture process. Based on the numerical results of the stress intensity factor, plastic zone and stress distribution, the fracture behavior of the FGM is discussed in detail.