The objective of this study is to investigate a particular type of crack problem in a layered structure consisting of a substrate, a bond coat, and an orthotropic functionally graded material coating. There is an internal crack in the orthotropic coating layer. It is parallel to the coating bond-coat interface and perpendicular to the material gradation of the coating. The position of the crack inside the coating is kept as a variable. Hence, the case of interface crack is also addressed. The top and bottom surfaces of the three layer structure are subjected to different temperatures and a two-dimensional steady-state temperature distribution develops. The case of compressively stressed coating is considered. Under this condition, buckling can occur, the crack can propagate, and the coating is prone to delamination. To predict the onset of delamination, one needs to know the fracture mechanics parameters, namely, Mode I and Mode II stress intensity factors and energy release rates. Hence, temperature distributions and fracture parameters are calculated by using finite element method and displacement correlation technique. Results of this study present the effects of boundary conditions, geometric parameters (crack length and crack position), and the type of gradation on fracture parameters.