Functionally graded materials (FGMs) are composites that have continuously varying material properties, which eliminate undesirable stress concentrations that might otherwise occur in layered composites. The concept of inhomogeneously varying properties is observed in nature; examples include bones, teeth, shells and timber. Modern engineering applications of FGMs include thermal barrier coatings, wear-resistant coatings, biomedical implants and MEMS devices. Syntactic foams, particle filled nano-composites are examples of inhomogeneous materials of current interest. Analyses and experiments available in the literature have focused on characterizing the inhomogeneous material modulus and density variations. Common techniques employed are nano-indentation and wave propagation studies. There are a few fracture mechanics analyses and experiments available in the literature; most of which are devoted to measuring the fracture toughness of graded materials. A few fracture analyses of graded materials are devoted to deriving asymptotic stress, strain and displacement fields around stationary and steadily growing cracks in inhomogeneous materials. Only a few studies exist that deal with understanding the effect of material property inhomogeneity on the spontaneous crack propagation. In the present thesis the effect of material property inhomogeneity on the dynamic fracture mechanics of cracks in FGMs is described. Numerical analysis of the elastodynamic initial boundary value problem is performed using a spectral scheme. Spectral scheme is a special numerical technique developed to simulate spontaneous, planar crack propagation in a variety of materials. The method is numerically efficient as it can be implemented on parallel machines with ease. The numerical scheme is versatile and can handle any state-and rate-dependent traction-separation laws (cohesive zone models) or frictional laws. Spectral scheme has successfully been used in simulating intersonic crack propagation, earthquake slip dynamics and also direct silicon wafer bonding process used in realizing 3D MEMS structures. In the present work, the spectral formulation accounts for the inhomogeneous variation in the material wave speeds in the medium. The effect of inhomogeneity on spontaneous crack propagation due to in-plane mixed-mode loading is also addressed here. A parametric study has been performed by varying the inhomogeneity length scales independently in the top and bottom half-spaces. The effect of inhomogeneity in shear wave speed on the dynamic stress intensity factors (SIFs) of a crack propagating in a quasi-steady-state along the interface between the two functionally graded half-spaces is studied. A symmetric hardening FGM offers the maximum fracture resistance, while the fracture resistance is minimum for a symmetric softening FGM. Our simulation shows that increasing the inhomogeneity in the wave speed leads to eliminate the overshoot in the dynamic stress intensity factor. The magnitude of the steady-state (long-time) SIF increases indicating an increase in the fracture resistance. The effect of the inhomogeneous wave speed on the mode-3 crack propagation characteristics is demonstrated by taking snapshots of the crack opening at a time interval. The magnitude of the crack sliding displacement is found to increase with increase in the inhomogeneity. The effect of the material property inhomogeneity on the mode-1 crack propagation is simulated to track the crack opening displacements. The inhomogeneity is assumed to be symmetric about the weak-plane. Our spectral scheme developed here for functionally graded material with exponential variation in the material properties is capable of simulating independent bimaterial combinations. When the graded material becomes progressively stiffer and denser (hardening), the crack opening displacement in reduced, indicating an increase in the fracture resistance. On the other hand, for the softening FGMs the crack opening displacement increases indicating a reduction in fracture toughness. It is noted that the cohesive fracture resistance on the weak-plane remains same in all the FGMs.