In this article, the thermoelastic contact problem involving a functionally graded coating and a homogenous substrate is considered. Determination of subsurface stresses is highly critical in the design of mechanical assemblages due to fatigue and fracture failures resulting from contact loading. In such con tact problems, cracking generally initiates at the locations of high subsurface stresses. The present study proposes a finite element methodology for the computation of subsurface stresses in functionally graded coatings subjected to frictional contact with heat generation. The method developed is based on iterations continued until convergence is observed in the contact zone heat flux values. Presented results illustrate the influences of various geometric and material parameters upon the subsurface stresses.