Recent experimental and theoretical studies of the fracture and fatigue behaviour of composites with graded material composition are reviewed. The effects of compositional and microstructural gradation on crack-tip stress fields, stress intensity factors and crack extension direction are summarised for cracks initially oriented both parallel and perpendicular to the gradient direction. Spatial variation of intrinsic fracture toughness, residual stresses, crack-wake effects, and the scale of the material gradient have all been observed to strongly influence crack propagation behaviour and failure resistance. Pertinent issues such as composite property prediction, crack deflection criteria, stress intensity factors for curved cracks and crack bridging are also discussed.