The behaviors of functionally graded (FG) engineering structures are influenced by various parameters, such as the boundary temperature, the angular velocity, variations in the thickness, the weight of the structure, and the loading state. The thermo-elastic characteristics of FG rotating circular disks under the loading of contact forces were investigated. Hooke’s law in plane stress problems was applied to derive a pair of partial differential equations and a finite volume method was developed due to the complexity of the governing equations. The thermo-elastic characteristics of the FG rotating disks were investigated according to the variations in their outer boundary temperature and angular velocity. The increase in the outer boundary temperature caused crack generation at the inner surface of the circular disk and on the opposite side to the loading point. The increase in the angular velocity caused unstable thermo-elastic behaviors near the area of the outer boundary surface, especially at 0.7 < (r − a)/(b − a) < 0.9, and may have led to crack generation at the outer surface of the rotating disk. These results may be applied to the design of functionally graded circular cutters or grinding disks undergoing contact forces to produce proper and reliable thermo-elastic characteristics for practical applications.