This study investigated the effects of laser power on the microstructure and mechanical properties of functionally gradient materials (FGM) produced by direct energy deposition. The FGM consisted of five different layers, which were a mixture of austenitic stainless steel (Type 316L) and ferritic steel (HSLA). During the direct energy deposition, two different laser power conditions (450W and 380W) were used. The ratio of Type 316L and HSAL at each deposition layers were 100:0, 65:35, 50:50, 25:75, and 0:100. After the direct energy deposition process, no cracks or delamination were seen between layers of the FGM. The effects of laser power on chemical composition and microstructure were not significant. However, as the laser power decreased, tensile strength and elongation changed with a small change in grain size. (Received July 20, 2020; Accepted August 5, 2020)