This paper investigates the buckling of a bi-layered material with functionally graded coating including a pre-existing interface crack. In order to investigate this phenomenon which is of particular interest to the tribological community, the stresses due to sliding cylindrical loading were determined. Solutions for stresses are obtained by use of Fourier transform technique. These stress fields under such loading are strongly affected by various parameters such as friction coefficient, indenter tip radius, film thickness, etc. Therefore, to assess the coating strength reliably, the mechanical stress field developed by mixed normal and tangential surface pressure was analyzed by considering the affected parameters. The mechanical properties of the FG coating are assumed to vary exponentially through the thickness. On the basis of stress analysis, a satisfactory framework was developed to study the buckling of FG coatings. An interface crack was assumed to model the actually occurring flaws in such coated systems, and the critical buckling stress was obtained.