The coupled fluid-structure interaction problem is analyzed using the theoretical method to investigate the coupled vibration characteristics of functionally graded material (FGM) cylindrical shells conveying an incompressible, inviscid fluid. Material properties are assumed to vary continuously through the thickness according to a power law distribution in terms of the volume fraction of the constituents. The steady flow of fluid is described by the classical potential flow theory. The motion of shell represented by the first order shear deformation theory (FSDT) to account for rotary inertia and transverse shear strains. The effect of internal fluid can be taken into consideration by imposing a relation between the fluid pressure and the radial displacement of the structure at the interface. Numerical examples are presented and compared with exiting results.