In this paper the response of circular cylindrical shell made of Functionally Graded Material (FGM) subjected to lateral impulse load was investigated. The effective material properties are assumed to vary continuously along the thickness direction according to a volume fraction power law distribution. First order shear deformation theory (FSDT) and Love's first approximation theory were utilized in the equilibrium equations. The boundary condition was considered to be simply supported. Displacement components are product of functions of position and time. Equilibrium equations for free and forced vibrations were solved using the Galerkin method. The impulse load in the form of time varying uniform pressure was applied onto a small rectangular area of the shell surface. The function of time for displacement components is obtained using the results of free vibration and convolution integral. Finally time response of displacement components is derived using mode superposition method. The influence of material composition (power law exponent), geometrical parameters (length to radius and radius to thickness ratios) and load parameters (position and size of the area of the applied load and peak pressure value for different pulse type) on the dynamic response was investigated.