Starting in the seventies, when it defined itself as an analytical orientation to language studies, North-American functional linguistics has refined and updated its theoretical principles and assumptions. Within the scope of functional linguistics, the concepts of discourse and grammar gain prominence. Although no discrepancies have been acknowledged with respect to how these concepts were originally defined, there have been, in more than three decades of studies, reformulations of such concepts with a view to 1) accounting for recent results in research; and 2) describing and interpretatively analyzing linguistic use. The present paper focusses on this trajectory, taking account of both international and national developments in this area of study, emphasizing, in Brazil, the production of knowledge carried out by the research group Grammar & Discourse, which pioneered studies in the area. Problems, tendencies and challenges in this area of investigation are also pointed out, and it is claimed that this is an area of investigation which still has much to contribute to a broader understanding of how language works.