This paper represents a comprehensive study of the fracture behaviour of linear elastic isotropic functionally graded materials (FGMs) subjected to mechanical and thermal loading. For this purpose, an improved graded 9-node quadrilateral finite element which includes the variation of elastic (Young's modulus and Poisson's ratio) and thermal properties (coefficient of thermal expansion and heat conductivity) at the element level is developed. The performance of the new element in conducting thermomechanical fracture analysis is evaluated by conducting a set of simulations to compare the fracture parameters in FGMs with sharp material and temperature gradients against those with mild material and temperature gradients. The reliability of the proposed element is verified by comparing with existing solutions. The thermomechanical coupling and its influence on the coupled modes of fracture which originates from the material gradient in FGMs are investigated. The influence of the steady-state temperature distribution, as well as the material gradient on the crack tip local fields and fracture parameters, such as stress intensity factors, mode mixity, and energy release rate, are studied. More importantly, it was found that compared with conventional homogeneous finite elements the current model is more reliable for modelling crack problems in FGMs.