Trying to make Toon Shader Material on UE4

Have you set the CelTexture’s filtering to Nearest? Right click on the texture in the content browser and click on Properties Matrix (I think that’s right? I’m not at the computer right now but it’s something like that) and change the filtering to Nearest.

By default it uses the texture group’s filtering setting which usually is either Bi-Linear or Tri-Linear, which means basically means if the texture is sampled between the dark pixel and the light pixel it will blend between them, this causes the gradients. Setting it to Nearest force it to sample the nearest actual pixel of the texture instead. Hope this helps!