Hi,
You need to enable FME for Arc in order to dothis.
I'm assuming you have an FME licence.
Go to Start> All Programs> FME Desktop > Utilities > FME Integration console.
In here you need to enable FME for Arc.
Now within Arc, in catalog, when you right click on a toolbox, you will see an option to create an FME tool. Create one of these, right click on it to Edit it and FME will launch.
You can then just import your FME tool into this and then add it to your modelbuilder model like you would embed any other model.
I hope this helps!
Thanks
Dan