Functionally graded materials (FGMs) have been an integral part of the bio-medical industry for a significant span of period. It has helped to address issues arising due to use of orthodox materials in the fabrication of implants and other surgical tools. With variations in the material concentration of a single material or combination of multiple materials affects its properties (mechanical, physical and chemical). This has been motivated by the enhancement in controlled deposition techniques and the ability to build structures with complex lattice formations. Additive Manufacturing (AM) has proven its proficiency in producing products with complex geometry and user-derived designs. FGMs and AM can be coupled together to fabricate parts with preferred set of functioning to improve bio-mechanical characteristics of implants, thus providing thrust to the scope of research in this field. This article focuses on the state-of-the-art study of functionally graded materials, overview of the currently available manufacturing techniques and methodologies that are being used to manufacture various artificial implants namely dental, cardiovascular, knee and hip implants. Along with this it also sheds light on the challenges that are limiting the success outcomes with probable ways to overcome them. © 2022 Author(s).