This paper is concerned with the theoretical treatment of thermoelastic problem involving a laminated composite strip with an interlayer of functionally graded material. The thermal and thermoelastic constants of the interlayer are assumed to vary exponentially in the thickness direction. We obtain the exact solution for the two-dimensional temperature change, and thermal stresses of a strip under the state of plane strain. Some numerical results for the temperature change, the displacement and the stress distributions are shown.