Onlookers lining the road chanted "Ali, Ali" as the hearse carrying his coffin drove through the downtown area. Rose petals were scattered along the route.
The burial took place several hours after thousands had said their farewells on the roadside.
It started with a Koran reading in Arabic as Imam Hamzah Abdul Malik recited Sura Fosselat, Prostration chapter 41 verses 30-35, which includes the words: "Truly those who say our Lord is God and are righteous, the angels will descend upon them saying have neither fear nor sadness but rather rejoice in this paradise that you have been promised."
Local Protestant minister Kevin Cosby said: "Before James Brown said 'I'm black and I'm proud', Muhammad Ali said 'I'm black and I'm pretty'."
Rabbi Michael Lerner attacked injustice against black people and Muslims, saying: "The way to honor Muhammad Ali is to be Muhammad Ali today - speak out and refuse to follow the path of conformity."
Ali's wife Lonnie told the crowd: "If Muhammad didn't like the rules, he rewrote them. His religion, his beliefs, his name were his to fashion, no matter what the cost. Muhammad wants young people of every background to see his life as proof that adversity can make you stronger. It cannot rob you of the power to dream, and to reach your dreams."
Former US President Bill Clinton described Ali as "a free man of faith." He said: "I think he decided very young to write his own life story. I think he decided that he would not be ever disempowered. Not his race, not his place, not the expectations of others whether positive or negative would strip from him the power to write his own story."
Among those attending the service were King Abdullah of Jordan, Will Smith, Spike Lee, David Beckham and Arnold Schwarzenegger. Smith and ex-boxing champion Lennox Lewis were among the pallbearers.
Ali was buried in a private ceremony attended by friends and family.