This paper presents a comparative analysis of the functional approach in the philosophical systems of Bharthari (5 CE) and Dharmakīrti (7 CE). In Dharmakīrti's works the functional approach is manifested in the concept of arthakriyā. Arthakriyā is introduced in order to justify inference as an instrument of valid knowledge. Somewhat similar to arthakriyā is the concept of activity (vyavahāra) met with occasionally in Bharthari's Vākyapadīya. Yet another parallel to Dharmakīrti's arthakriyā is the general functional approach introduced repeatedly by Bharthari in order to justify mutually exclusive doctrines on account of their agreement with the common usage. In this paper I will discuss the similarities and differences between vyavahāra and arthakriyā, their role in Bharthari's and Dharmakīrti's philosophical systems and the possible relation of the functional tendencies in Bharthari's linguistic philosophy and the Buddhist Pramāavāda.