Nelson Mandela's state funeral at his ancestral home in Qunu ends a week of commemorations for South Africa's first black leader.
Some 4500 people - including foreign dignitaries - are attending the funeral, which blends state ceremonial with traditional rituals.
Mr Mandela died on 5 December aged 95.
A close friend, Ahmed Kathrada, told the service he had lost an "elder brother" who was with him for many years in prison on Robben island.
Mr Kathrada's voice filled with emotion as he spoke of the difficulty of recent months and of how he had held his friend's hand the last time he saw him in hospital. "Farewell my dear brother, my mentor, my leader," he said.
Two grandchildren then addressed the congregation. Ndaba who read an obituary, and Nandi, who spoke fondly of her grandfather as a disciplinarian. "We shall miss you... your stern voice when you are not pleased with our behaviour. We shall miss your laughter."
African National Congress members, veterans of the fight against apartheid and foreign dignitaries - including several African presidents and the Prince of Wales - are among the guests.
Archbishop Desmond Tutu - a long-time friend of Nelson Mandela - is also at the funeral, having earlier said he had cancelled his flight as he had not received an invitation.
The South African government had earlier said the archbishop was accredited, but that no formal invitations had been sent out.
The BBC reports that some guests have been singing and dancing to celebrate Mr Mandela's life.
After the two-hour service, Mr Mandela's Thembu community will conduct a private traditional Xhosa ceremony - including songs and poems about Mr Mandela's life and his achievements.
An ox will be slaughtered. A family elder will stay near the coffin, which has been draped with a lion's skin, to talk "to the body's spirit".
On Saturday, Mr Mandela's coffin was flown from Waterkloof airbase in Pretoria on a C130 military aircraft, escorted by two fighter jets. It later landed at Mthatha airport, some 700 kilometres away.
In line with tribal custom, Nelson Mandela's grandson Mandla accompanied him on the journey, speaking to his coffin to tell him he was on his way home to rest.
President Jacob Zuma, other ANC leaders and more than 1000 members of the organisation which Mr Mandela once led, attended the event at the Waterkloof air base.
It included a multi-faith service and a musical tribute.
Mourners heard President Zuma pay his own tribute to Nelson Mandela, calling him a "towering figure", "a man of action" and a "democrat who understood the world."
At least 100,000 people saw the former president's body lying in state during the week in Pretoria, but some had to be turned away.