Functionally-graded or composite components (FGCs) have been recognised as having immense potential for many industries. So far, deposition of compositionally graded alloys is the only method that has been shown to be a practical way to produce FGCs. In this work, a second way, that allows graded structures of a single material to be formed by direct metal deposition, is investigated. Simple component samples are built using a diode laser direct metal deposition system with a side feed nozzle and blends of water- and gasatomised 316L steel powder in varying proportions. Trends in surface finish, wall integrity and overall wall dimensions are immediately apparent. Further analysis using optical, x-ray diffraction and mechanical testing methods shows that it is possible to produce differences in physical properties such as tensile strength and hardness across a formed component. The system is modelled and the results discussed in terms of the thermal cycle of the build material.