<p>WC–Co is valued for its high hardness and wear resistance, but its limited toughness restricts broader applications. To address this, a unique architecture was designed where steel layers are sandwiched between WC–17Co regions to improve ductility by development of a functionally gradient structure. Laser direct energy deposition (LDED) technique as a relatively new additive manufacturing technology (AM) was employed to develop this design due to its precision and suitability for developing complex geometries. Because LDED operates on a layer-by-layer basis, it allows gradual compositional transitions, enabling the creation of a functionally graded material (FGM) that minimizes thermal mismatch and stress concentration. The resulting microstructure was examined using scanning electron microscopy (SEM), energy-dispersive X-ray spectroscopy (EDS), X-ray diffraction (XRD), and electron backscatter diffraction (EBSD). For comparative purposes, all experiments were performed on a conventional (non-FGM) LDED-processed WC–17Co sample as well. The average porosity and grain size was smaller in FGM compared to the non-FGM sample. Substantial deviations in lattice parameter of WC for the FGM sample were observed compared to the non-FGM one and reported literature for conventionally-processed WC–17Co. XRD results revealed that the FGM sample exhibits a shift in detected peaks followed by reduced residual stress than the non-graded structure, thereby decreasing the likelihood of crack initiation. The measured crystallite sizes aligned well with previously published data. While FGM sample exhibited higher hardness than non-FGM, it should also be noted that detailed analysis of mechanical properties is not within the scope of this study. This is a preliminary study only focusing on microstructural characteristics, and results could be used to explain mechanical, thermal, and electrical properties of newly developed structures in future studies.</p>