Functionally graded materials (FGMs), due to their characteristic spatial gradient of structural/compositional features, exhibit unique properties not possessed by their constituent components. Specific applications of FGMs cover diverse areas including biomedicine, tissue engineering, structural composites for advanced applications, etc. This chapter deals with a case study of synthesis of and characterization of FGMs consisting of soft magnetic iron/nickel particles as filler in styrene-butadiene rubber matrix. Effect of concentration gradient on the physical, mechanical, and magnetic properties of the composites has been reported. © Springer-Verlag Berlin Heidelberg 2017.