This contribution deals with a new truss element with varying stiffness intended to geometric and physically nonlinear analysis of composite structures. We present a two-node straight composite truss finite element derived by new nonincremental full geometric nonlinear approach. Stiffness matrix of this composite truss contains transfer constants, which accurately describe the polynomial longitudinal variation of cross-section area and material properties. These variations could be caused by nonhomogenous temperature field or by varying components volume fractions of the composite or/and functionally graded materials (FGM´s). Numerical examples were solved to verify the established relations. The accuracy of the new proposed finite truss element are compared and discused.