A 21-gun salute and full military honour guard escorted Mandela's coffin to a marquee where 4,500 mourners said their final goodbyes.
His flag-draped casket was placed on cow skins, surrounded by 95 candles — each signifying a year of his extraordinary life.
"The person who lies here is South Africa's greatest son," said ANC deputy president Cyril Ramaphosa in an opening address.
Mandela's widow, Graca Machel, who was seldom far from his bedside during his final months, looked on disconsolate, along with his former wife Winnie Madikizela-Mandela.
The frail and aging leaders of South Africa's anti-apartheid struggle also attended: George Bizos, Desmond Tutu and Ahmed Kathrada, whose voice broke with emotion as he delivered a eulogy for his old friend.
"I first met him 67 years ago," said Kathrada, who along with Mandela was sentenced to life in prison in 1963.
He recalled his fellow inmate as a powerful amateur boxer who could cope far better than others with the physical challenge of hard labour.
"What I saw in hospital was a man helpless and reduced to a shadow of himself," he said struggling not to break down.
"We can salute you as a fighter for freedom. Farewell my dear brother, my mentor, my leader.
"Now I've lost a brother my life is in a void and I don't know who turn to."
His words left many in tears among the invited guests, whose ranks included foreign dignitaries and celebrities ranging from Britain's Prince Charles to US talk show queen Oprah Winfrey.
Private burial for a public icon
Mandela will be buried with traditional Xhosa rites in a graveyard that sits on the sprawling family estate Mandela built in Qunu after his release from prison in 1990.
"It was in that village that I spent some of the happiest years of my boyhood and whence I trace my earliest memories," he wrote in his autobiography.
Overseen by male members of his clan, the burial will include the slaughter of an ox — a ritual performed through various milestones of a person's life under the clan's traditions.
During the ceremony, Mandela will be referred to as Dalibhunga, the name given to him at the age of 16 after undergoing the initiation to adulthood
Mourners will wear traditional Xhosa regalia, with blue and white beaded headgear and necklaces.
Xhosa speakers are divided into several groups, including the Thembu people, of which Mandela is a member.
The funeral closes the final chapter on a towering public figure whose courage and moral fortitude turned him into a global symbol of freedom and hope.
During 10 days of mourning, hundreds of thousands of South Africans had turned out across the country to bid the founding father of their "Rainbow Nation" farewell.
They braved a rain-sodden memorial in Soweto and for three days queued to see his remains as they lay in state at Pretoria's Union Buildings.
Lines of mourners enveloped a city that was once the bastion of white rule.
For 50 million compatriots, Mandela was not just a president, but a moral guide who led them away from internecine racial conflict.
For the rest of the world he was a charismatic leader of the anti-apartheid struggle — in turn a poet, saint and scholar.
"Ever since he passed away, I wanted to walk the journey with him," said Pascal Moloi, 52, who made the trip from Johannesburg to Qunu to attend a public viewing.
While Mandela had been critically ill for months, the announcement of his death on Dec. 5 still sent a spasm through a country struggling to carry forward his vision of a harmonious multi-racial democracy of shared prosperity.
During the funeral South African President Jacob Zuma told the country it was incumbent on them to carry on his legacy.
"One thing we can assure you of today Tata [father], as you take your final steps, is that South Africa will continue to rise.
"South Africa will continue to rise because we dare not fail you," Zuma said.
For the rest of the world, Mandela's death marked the loss of that rarest of world leaders: those who are viewed with near universal respect and admiration.
Gushing tributes poured in from every corner of the globe, although Mandela himself had always stressed he was part of a communal leadership and resisted any move towards his public canonization — posthumous or otherwise.