This paper presents mode I stress intensity factors for external circumferentially cracked hollow cylinders, which are assumed to be made of functionally graded materials and subjected to remote uniform tension. The conventional finite element method is improved by introducing isoparametric transformation for simulating the gradient variations of material properties in the finite elements. This improved finite element method is verified to be effective and efficient. Various types of functionally graded materials and different gradient compositions for each type are investigated. The results show that the material property distribution has a quite considerable influence on the stress intensity factors.