Impact properties and fatigue crack growth behavior of a newly developed Al-Zn-Mg functionally graded material (FGM) is studied. The gradient in terms of hardness (about 85 to 130 VHN) and yield strength (about 260 to 360 MPa) is established along the width of the Charpy-impact and Compact Tension specimens. In both these test specimens two types of FGMs, depending on the direction of crack propagation, are produced. In the first case, FGM-I, the notched surface is made harder and the hardness value decreases towards the other surface in the direction of crack growth. In the second case, FGM-II, the hardness gradient is reversed and the crack propagation takes place from the softer side to the harder side. The impact and fatigue crack growth experiments are also carried out for the homogeneous materials with different hardness values and the results obtained from the FGMs are compared with them. The results of impact tests show that FGM-II absorbs about 20% greater energy than the highest energy absorbed by any of the isothermally aged homogeneous materials. Fatigue crack growth studies for the FGM-I show a reduction in crack growth rate as the crack propagates towards softer (ductile) side and finally crack arrest is observed. On the other hand, for the case of FGM-II, where the crack propagates towards the harder side, the crack growth rate first increases and then decreases. However, in this case the crack follows a tortuous path and it starts bending upwards after about 20 mm crack length, which might be responsible for higher energy absorption in impact tests.