Her coffin was processed through central London with full military honors before arriving at St. Paul's Cathedral, where more than 2,000 relatives, friends and dignitaries gathered for the funeral service.
In front of a congregation that included Queen Elizabeth II, Prime Minister David Cameron, former prime minister Tony Blair and former US secretary of state Henry Kissinger, the Bishop of London said Thatcher was at peace after "the storm of a life led in the heat of political controversy."
In line with Thatcher's own instructions, the service was kept simple, with no eulogy.
Cameron called the proceedings, which were one notch down from the state funeral reserved for British monarchs, a "fitting tribute to a great prime minister respected around the world."
Others disagreed, however, and despite Cameron's call for Thatcher's critics to "show respect," there were reports of protests along the procession route.
Scores of people booed her coffin as it passed and chanted "Maggie, Maggie Maggie! Dead, dead, dead!", according to Agence France-Presse. Others mounted a silent protest, holding banners such as: "Rest of us in Poverty."
"We've got people starving in this country and people going to food banks because of welfare cuts. It is too much to be spending," one demonstrator told the BBC, referring to the £10 million ($15.3 million) of public money used to pay for Thatcher's send-off.
Some 4,000 police officers were deployed in central London in anticipation of disturbances, but the demonstrations seem to have remained small-scale.
Other protests took place elsewhere in the UK.
Thatcher's remains will be cremated in a private ceremony, her family said.
She was Conservative prime minister between 1979 and 1990, making her the UK's first woman PM and its longest-serving in modern history.