The Italian MotoGP rider died on Sunday after suffering fatal wounds during a crash on the Sepang track at the Malaysia event.
Simoncelli lost control of his Honda at turn 11 and swerved across the track, straight into the path of compatriot Valentino Rossi and American rider Colin Edwards.
More than 20,000 fans paid their respects yesterday, filing past his coffin at the Coriano Theatre.
Large crowds gathered outside the church in Coriano where the funeral was held to bid farewell to the 24-year-old - nicknamed Sic.
Members of the motorsports world, family and friends were present at the funeral while thousands watched it on national television, including those who saw it on big screens set up in Coriano's village square.
Among those present at the service was his close friend and seven-time world champion Rossi, Spanish rider Jorge Lorenzo as well as Gresini Racing Team boss Fausto Gresini.
Gresini said: "We must do what we are doing, to be close to the family and honour Marco for what he has done.
"Perhaps we didn't consider just how much he was loved, we thought we knew it, but the number of people that have come here has been truly great.
"This is comforting even though we have a lot of pain inside."
Two of Simoncelli's motorbikes - a Gilera 250 and a Honda - guarded the coffin while his helmet with the number 58 was placed above the casket.
Red balloons with the number 58 were released outside the church and there were numerous banners.
One read: "Sic -58- you will remain always in our hearts."
Rossi took Simoncelli's Honda out of the church with Simoncelli's coffin, carried by his friends, right behind it as fans applauded outside the church.
The Italian's death was the first fatality in the MotoGP since Japan's Daijiro Katoh died from injuries sustained at the 2003 Japanese Grand Prix.