: The LT-MFS approach is proposed to solve two-dimensional transient heat conduction problem in functionally graded materials (FGMs). First, a Laplace transform approach is used to move the time variable. Then, a fundamental solution in Laplace space for FGMs is constructed. Next, the solution in Laplace space is approximated by the linear combination of fundamental solutions. Further, Stefest’s algorithm is employed to convert the results in Laplace space back into the time–space domain. Finally, the method is tested on several benchmark examples. The results demonstrate well the efficiency and accuracy of the proposed method.