We fabricated a crack-free joining of Ni and Al2O3 using a functionally graded method. Because porosity reduction is important, particle size of the Ni and Al2O3 powders was varied to improve green body density and minimize shrinkage during sintering. As a result, crack-free joining of a Ni–Al2O3 sample with 10 layers was obtained. The ANSYS simulation tool was used to calculate residual stress. The hardness and modulus of each graded layer were measured using an Vickers’ indenter. The experimental values matched the simulation results, showing that this analysis is useful when residual stresses are very difficult to measure experimentally.