In this paper we use local linear regression method to estimate functional-coefficient in panel data with interactive fixed-effects. The use of interactive fixed-effects not only captures cross-sectional dependence but also mitigates endogeneity problem while maintaining flexible context-based covariate effects. We establish the uniform strong consistency result of the functional-coefficient estimator. A cross-validation procedure combined with an iterative algorithm is used in Monte Carlo simulation to demonstrate the good finite sample properties of the proposed estimator.