As to an ideally layered structure with a functionally graded piezoelectric substrate (material parameters change continuously along the thickness direction) and a hard dielectric layer, the existence and propagation behavior of transverse surface waves is studied by analytical technique. The dispersion equations for the existence of the transverse surface waves with respect to phase velocity are obtained for electrically open and short circuit conditions, respectively. A detailed investigation of the effect of gradient coefficient on dispersion relation, electromechanical coupling factor and penetration depth is carried out. It is found by numerical examples that adjusting gradient coefficient makes the electromechanical coupling factor of the transverse surface waves achieve quite high values at some appropriate ratio values of the layer thickness to the wavelength, and at the same time, the penetration depth can be reduced to the same order as the wavelength.