In this paper the three dimensional dynamic analysis and stress wave propagation in thick functionally graded plate subjected to impact loading is studied. Material properties (elasticity modulus and density) are assumed to vary continuously through the thickness direction of the plate according to a simple power law distributions and the Poisson’s ratio is assumed to be constant. The equations of motion are based on three dimensional theory of elasticity. The three dimensional Graded Finite Element Method (GFEM) based on Rayleigh-Ritz energy formulation and Newmark direct integration method has been applied to solve the equations in time and space domains. It is assumed that in dynamic loading the upper surface of the plate is subjected to a pressure load that varies linearly with time, and suddenly is unloaded at a specified time. This unloading acts as an impact loading. Afterward, the time histories of displacement through the thickness, stresses in three dimensions and velocity of stress wave propagation for different values of power law exponents, various boundary conditions and thickness to length ratios have been investigated. The obtained results are in agreement with available data in literature.