Geometrically nonlinear analysis of planar beam and frame structures made of functionally graded material (FGM) by using the finite element method is presented. The material property of the structures is assumed to be graded in the thickness direction by a power law distribution. A nonlinear beam element based on Bernoulli beam theory, taking the shift of the neutral axis position into account, is formulated in the context of the co-rotational formulation. The nonlinear equilibrium equations are solved by using the incremental/iterative procedure in a combination with the arc-length control method. Numerical examples show that the formulated element is capable to give accurate results by using just several elements. The influence of the material inhomogeneity in the geometrically nonlinear behavior of the FGM beam and frame structures is examined and highlighted.