SUMMARYFunctionally graded materials (FGMs) are advanced materials that possess continuously graded properties, such that the growth of cracks is strongly dependent on the gradation of the material. In this work a thermodynamic consistent framework for crack propagation in FGMs is presented, by applying a dissipation inequality to a time-dependent migrating control volume. The direction of crack growth is obtained in terms of material forces as a result of the principle of maximum dissipation. In the numerical implementation a staggered algorithm-deformation update for fixed geometry followed by geometry update for fixed deformation-is employed within each time increment. The geometry update is a result of the incremental crack propagation, which is driven by material forces. The corresponding mesh is generated by combining Delaunay triangulation with local mesh refinement. Furthermore a Newton algorithm is proposed, taking into account mesh transfer of displacements for crack propagation in incremental elasticity. In two numerical examples brittle crack propagation in FGMs is investigated for various directions of strength gradation within the structures.