A numerical method based on the extension of the variable material property method was developed to obtain the elasto-plastic stress field in a functionally graded (FG) rotating disk. The method was applied to estimate the stress field in a metal–ceramic functionally graded solid disk. To establish the validity of the proposed method, results were compared with finite element results. Unlike uniform rotating disks, where yielding starts from the disk center, plasticity in FG disks can originate at any point. The effect of different metal–ceramic grading patterns as well as the relative elastic moduli and densities of the ceramic and metallic constituents on the developed stresses were studied. Reinforcement of a metal disk with ceramic particles, in both elastic and plastic regimes, can significantly influence the mechanical response of the disk such as the stress distribution and the critical angular velocities corresponding to the onset of plasticity in the disk and plastic disk. Disks with increasing ceramic content from inner to outer radius showed a more uniform von Mises stress distribution for a fixed value of total ceramic content. In contrast, disks with decreasing ceramic content from inner to outer radius had the lowest outer edge displacement for a fixed value of total ceramic content.