In this study, the development of a functionally graded material (FGM) with hard outer surfaces and a tougher inner core was envisaged. The applicability of electrophoretic deposition (EPD) for the processing of FGM materials by continuously changing the suspension composition is shown. Optimisation of the colloidal processing technique was combined with hot pressing experiments on homogeneous composites in the Al2O3-ZrO2-Ti(C,N) system in order to create a very hard functionally graded material with beneficial residual stresses. Finally, the residual stress distribution was briefly discussed using an existing analytical model.