Functional grammar is the name given to any of a range of functionally-based approaches to the scientific study of language. A typical example is the grammar model developed by Simon Dik; another important figure in recent linguistic functionalism is Talmy Givón .

Dik characterises functional grammar as follows:

In the functional paradigm a language is in the first place conceptualized as an instrument of social interaction among human beings, used with the intention of establishing communicative relationships. Within this paradigm one attempts to reveal the instrumentality of language with respect to what people do and achieve with it in social interaction. A natural language, in other words, is seen as an integrated part of the communicative competence of the natural language user (2, p. 3)

Because of its emphasis on usage, communicative function, and the social context of language, functional grammar differs significantly from other linguistic theories which stress purely formal approaches to grammar, for instance Chomskyan generative grammar. Funtional grammar is strongly associated with the school of linguistic typology that takes its lead from the work of Joseph Greenberg.

References:

1. Functional grammar home page
2. Dik, SC, The Theory of Functional Grammar (Part I: The Structure of the clause), 1989