This paper presents an analytical approach to investigate the buckling and postbuckling of functionally graded cylindrical shells subjected to axial and transverse mechanical loads incorporating the effects of temperature. Material properties are assumed to be temperature independent, and graded in the thickness direction according to a simple power law distribution in terms of the volume fractions of constituents. Equilibrium equations for perfect cylindrical shells are derived by using improved Donnell shell theory taking into accout geometrical nonlinearity. One-term approximate solution is assumed to satisfy simply supported boundary conditions and closed-form expressions of buckling loads and load-deflection curves are determined by Galerkin method. Analysis shows the effects of material and the geometric parameters, buckling mode, pre-existent axial compressive and thermal loads on the nonlinear response of the shells.