A Y₂Ti₂O₇/316L stainless steel functionally graded composite material was fabricated through powder lamination and hot-press sintering processing, and its microstructure and some mechanical properties were investigated. The observations of optical microscopy, X-ray diffractometry, and electron probe microanalysis all confirmed the formation of compositional and microstructural gradients in the transition region between the metal and oxide halves. Some mechanical properties of the graded composite were also preliminarily evaluated, by performing the mechanical testing on homogeneous composite samples with different volume fractions of Y₂Ti₂O₇. The results suggested that some mechanical properties vary in the same gradient of composition and microstructure, i.e. relative density and bending strength increase gradually while Vickers hardness decreases gradually with the increase of metal content in the transition region.