Ceramic On-Demand Extrusion (CODE) is an extrusion-based additive manufacturing process recently developed for fabricating dense, functional ceramic components. Presented in this paper is a further development of this process focusing on fabrication of functionally graded materials (FGM). A dynamic mixing mechanism was developed for mixing constituent ceramic pastes, and an extrusion control scheme was developed for fabricating specimens with desired material compositions graded in real time. FGM specimens with compositions graded between Al2O3 and ZrO2 were fabricated and ultimately densified by sintering to validate the effectiveness of the CODE process for FGM fabrication. Energy dispersive spectroscopy (EDS) was used to compare final compositions to the original material designs. The specimen’s hardness at different locations along the gradients was examined by micro-indentation tests. The dimensions of sintered specimens were measured, and the effects of material composition gradients on the distortions of sintered FGM specimens were analyzed