Asphalt overlays provide an economical means for treating deteriorated pavements. Thin bonded overlay (TBO) systems have become popular options for pavement rehabilitation. In addition to functional improvements, these systems ensure a high degree of waterproofing benefits. Conventional asphalt concrete fracture tests were developed for pavements with homogeneous asphalt concrete mixtures, and typically their thicknesses exceed 50 mm (2 inch). The use of spray paver technology for construction of TBO leads to continuously varying asphalt binder content, up to approximately one-third of the layer thickness. Commonly utilized fracture test geometries for asphalt concrete include the single-edge notched beam, SEN[B], the disk-shaped compact tension, DC[T], and the semi-circular bend, SC[B]. The SEN[B] test geometry is not preferable for use in pavement systems due to difficulties in procuring beam samples from the field. Applications of the other established test geometries, the DC[T] and SC[B] tests, are limited because of the material nonhomogeneity caused by nonuniform distribution of asphalt binder and smaller as-constructed thicknesses of TBO, which are usually less than 25 mm (1 inch) for gap-graded and 50 mm (2 inch) for dense-graded hot mix asphalt (HMA) mixtures. Both the DC[T] and SC[B] tests simulate movement of the crack fronts in transverse or longitudinal directions in the pavement. Use of these tests on field-procured samples of TBO yields a crack front that encounters nonhomogeneous material through the specimen thickness. The crack moves perpendicular to the axis of material nonhomogeneity, which makes data interpretation and fundamental material fracture characterization challenging. In addition, the crack in the specimen is correlated to a crack channeling across the pavement width rather than a bottom-up or top-down direction, which is more desirable from the standpoint of coupling experimental results with currently available simulation models. This paper proposes a test procedure for fracture characterization of graded asphalt pavement systems that have significant material property gradients through their thicknesses. Suitable specimen geometry and testing procedures were developed using ASTM E399 and ASTM D7313-07b as a starting point. Laboratory tests were performed using an optimized compact tension, or C[T], test geometry for field cores as well as laboratory-fabricated composite specimens. Laboratory testing using the proposed procedure clearly showed distinction in the fracture characteristics for specimens prepared with varying material compositions. The capability of distinguishing different materials combined with stable crack growth makes the proposed testing procedure ideal for fracture characterization of thin and graded pavement systems. Statistical analysis of test data revealed that the proposed C[T] test procedure is capable of detecting differences in fracture energy results across a wide range of pavement systems and yields a low test variability. Finite element simulations of the test procedure further indicate the suitability of the test procedure as well as demonstrating a procedure for extraction of fundamental material properties.