A novel method of fabricating functionally graded extruded composite materials is proposed for propellant applications using the technology of continuous processing with a Twin-Screw Extruder. The method is applied to the manufacturing of grains for solid rocket motors in an end-burning configuration with an axial gradient in ammonium perchlorate volume fraction and relative coarse/fine particle size distributions. The fabrication of functionally graded extruded polymer composites with either inert or energetic ingredients has yet to be investigated. The lack of knowledge concerning the processing of these novel materials has necessitated that a number of research issues be addressed. Of primary concern is characterizing and modeling the relationship between the extruder screw geometry, transient processing conditions, and the gradient architecture that evolves in the extruder. Recent interpretations of the Residence Time Distributions (RTDs) and Residence Volume Distributions (RVDs) for polymer composites in the TSE are used to develop new process models for predicting gradient architectures in the direction of extrusion. An approach is developed for characterizing the sections of the extrudate using optical, mechanical, and compositional analysis to determine the gradient architectures. The effects of processing on the burning rate properties of extruded energetic polymer composites are characterized for homogeneous formulations over a range of compositions to determine realistic gradient architectures for solid rocket motor applications. The new process models and burning rate properties that have been characterized in this research effort will be the basis for an inverse design procedure that is capable of determining gradient architectures for grains in solid rocket motors that possess tailored burning rate distributions that conform to user-defined performance specifications.