Exact analytical solutions of in-plane static problems of circular beams with uniform cross-section made of functionally graded material (FGM) are obtained. Material properties are assumed to be varying arbitrarily through the thickness. The effects of axial extension and shear deformations are considered. The differential equation system is solved exactly using the initial values method. The circumferential stress distribution on the cross-section is also obtained. The results are compared with those of rather complex approaches in the literature, such as elasticity approach, and the comparison shows an excellent agreement. Effects of power law exponent and radius-to-height ratio of the beam on circumferential stress distribution and displacements are investigated.