This paper investigates the large amplitude vibration behavior of a shear deformable FGM cylindrical shell of finite length embedded in a large outer elastic medium and in thermal environments. The surrounding elastic medium is modeled as a Pasternak foundation. Two kinds of micromechanics models, namely, Voigt model and Mori–Tanaka model, are considered. The motion equations are based on a higher order shear deformation shell theory that includes shell-foundation interaction. The thermal effects are also included and the material properties of FGMs are assumed to be temperature-dependent. The equations of motion are solved by a two step perturbation technique to determine the nonlinear frequencies of the FGM shells. Numerical results demonstrate that in most cases the natural frequencies of the FGM shells are increased but the nonlinear to linear frequency ratios of the FGM shells are decreased with increase in foundation stiffness. The results confirm that in most cases Voigt model and Mori–Tanaka model have the same accuracy for predicting the vibration characteristics of FGM shells.