Around 1,200 guests were expected at the private service for the Grammy-nominated star, who died in a plane crash in the Bahamas on Saturday.
A horse-drawn glass carriage carried Aaliyah's coffin to the church, as her mother and brother followed behind.
Hundreds of fans gathered outside the St Ignatius Loyola Roman Catholic Church in Manhattan, New York, cheered in tribute as the carriage passed.
"It is so beautiful. She's going out like a princess," said Nicole Campbell, 24, who had waited at the church since Thursday.
After the service, Aaliyah's mother released the first of 22 white doves, one for each year of the singer's life.
Fans sang one of Aaliyah's songs, One in a Million.
Other celebrities at the funeral included R&B singer Usher, and rappers Busta Rhymes, Jay-Z and Lil' Kim.
Hollywood producer Joel Silver was also among the congregation, as he had signed Aaliyah to star opposite Keanu Reeves in the second and third instalments of The Matrix.
A private mass was later held at the Frank E Campbell Funeral Home, attended by some 100 family members and friends.
The home has in the past handled arrangements for John Lennon, Jacqueline Onassis, and Notorious BIG.
A book of condolence has been set up at the funeral home for fans and well-wishers to sign.
One fan has written: "May U Rest in Peace - You are still the greatest, your light will shine on."
Others have simply printed their names and addresses.
The book has already been extended because of the volume of people wishing to add their thoughts.
Several large flower arrangements were carried in through a side door, including a bouquet of pink roses bearing a card with "Aaliyah" printed inside a heart.
A memorial fund has been set up in Aaliyah's name with the money being split between breast cancer charities.
The topic was close to the singer's heart and she was due to play the Breathe benefit concert on 27 October to raise funds for the cause.
A public memorial is also being held in the centre of New York where a continuous loop of Aaliyah's songs and videos is being played.
An investigation is continuing into Saturday's tragedy which killed the singer and eight others.