In this study, additive manufacturing of a functionally graded material (FGM) as an alternative to joining dissimilar metals is investigated using directed energy deposition (DED). FGM consists of five different layers, which are mixtures of austenitic stainless steel (type 316 L) and low-alloy steel (LAS, ferritic steel) at ratios of 100:0 (A layer), 75:25 (B layer), 50:50 (C layer), 25:75 (D layer), and 0:100 (E layer), respectively, in each deposition layer. The FGM samples are successfully fabricated without cracks or delamination using the DED method, and specimens are characterized using optical and scanning electron microscopy to monitor their microstructures. In layers C and D of the sample, the tensile strength is determined to be very high owing to the formation of ferrite and martensite structures. However, the elongation is high in layers A and B, which contain a large fraction of austenite.