The co-deposition of multiple powder feedstocks during metal additive manufacturing (AM) can be used to fabricate materials with spatially dependent properties, which can be engineered to contain different function- alities (i.e., functionally integrated materials, FIMs). Although the transition region that forms between dissimilar materials has been studied in detail, the influence of co-deposition on the resultant spatial phase distribution and associated mechanical behavior has heretofore not been reported. In this study, FIM samples transitioning from stainless steel (SS) 316 L to Haynes 282 Ni-based superalloy were deposited via directed energy deposition (DED). The FIM samples were compared to baseline, homogeneous single-alloy deposited samples using digital image correlation during tensile testing, together with microscopy, energy-dispersive X-ray spectroscopy, elec- tron backscattered diffraction, and thermodynamic modeling, to assess the performance of different co- deposition strategies. Each FIM sample exhibited a compositionally and microstructurally unique transition re- gion from SS 316 L to Haynes 282, which was found to have implications on the strain localization across the transition region during uniaxial tensile loading. Finer step sizes in co-deposition were found to minimize strain localization by avoiding sharp compositional interfaces in the transition region.