Functional grammar has received more and more attention from domestic scholars in the world of linguistics since 1970s, but it is still new to most EFL teachers. In spite of controversies about its applications into classroom teaching, this new grammar model has its own advantages and can facilitate EFL students to achieve academic success. This paper, based on current literature, examines and analyzes the following issues: the nature of functional grammar, the key concepts of functional grammar, the fundamental differences between traditional grammar and functional grammar, and the implications for English teaching and learning. The purpose of this paper is to help EFL teachers have an overall understanding of the theory and key concepts of functional grammar as well as the positive role functional grammar plays in school contexts.