Lead tin telluride based compounds are p-type materials for thermoelectric applications, in the 50-600̈C temperatures range. The electronic transport properties of PbTe and Pb1-x SnxTe materials are strongly dependent on the processing approach. Powder metallurgy is a suitable approach for Functionally Graded Materials (FGMS) preparation but its effects on the electronic properties have to be carefully checked. Powder metallurgical processing may introduce atomic defects and local strains into the material and, thereby, alter the carrier concentration. Consequently such material may be in non-equilibrium conditions at the operating temperature with unstable thermoelectric properties. This effect can be reduced and eliminated by appropriate annealing procedures. In FGMs, annealing up to the stabilization of the thermoelectric properties is mandatory for achieving the desired carrier concentration profile along the sample. The design procedures of the FGMs, as well as the annealing effects on cold compacted and sintered Pb 1-xSnxTe samples are described in details.