This paper is to study the two-dimensional dynamic stress of a functionally graded material (FGM) plate with a circular hole under plane compressional waves at infinity. With using the method of piece-wise homogeneous layers, the dynamic stress distribution of the FGM plate having radial arbitrary material parameters is derived based on the complex variable method. As examples, numerical results are presented for the FGM plate having given radial shear modulus, density and Poisson’s ratio. It is found that the dynamic stress around the circular hole in the FGM plate can be effectively reduced by choosing the proper change ways of the radial material parameters for different frequency incident wave.