Functionally graded materials are new types of composites with heterogeneous microstructure in which some particular physical and mechanical properties change continuously in the thickness direction. In this research, a five-layer copper–iron functionally graded material was fabricated by changing the composition of the layers in a stepwise function between copper and iron using powder metallurgy method. The effect of fabrication process on the microstructure and tensile strength of functionally graded beam was investigated by using two types of presses: uniaxial press and cold iso-static press. Microscopic studies demonstrated appropriate connections between the layers and particles. To achieve ultimate tensile strength and strain, functionally graded copper–iron specimens were tested in tensile loading. The stress–strain graphs obtained from the test showed enhancement in tensile strength of copper and iron functionally graded beam compared to pure copper and iron beams. Finally, a model of this functionally graded material was analysed in ABAQUS finite element code, and the results were verified by experimental tests. Therefore, the present finite element model would be useful to investigate tensile behaviour of functionally graded materials.