Functionally graded materials (FGMs) show continuous variations in properties and offer unique multifunctional capabilities. This study presents a simulation of the powder bed fusion (PBF) process for FGM fabrication using a combination of Unity-based deposition and lattice Boltzmann method (LBM)-based process models. The study introduces a diffusion model that allows for the simulation of material mixtures, in particular AISI 316L austenitic steel and 18Ni maraging 300 martensitic steel. The Unity-based model simulates particle deposition with controlled distribution, incorporating variations in particle size, friction coefficient, and chamber wall rotation angles. The LBM model that simulated free-surface fluid flow, heat flow, melting, and solidification during the PBF process was extended with diffusion models for mixture fraction and concentration-dependent properties. Comparison of the results obtained in simulation with the experimental data shows that they are consistent. Future research may be connected with further verification and validation of the model, by modeling different materials. The presented model can be used for the simulation, study, modeling, and optimization of the production of functionally graded materials in PBF processes.