Red-clad cardinals, dignitaries and thousands of priests and nuns from around the world gathered to say goodbye to the German theologian, who stunned the Catholic church in 2013 by becoming the first pontiff in six centuries to resign.
To the sound of tolling bells, 12 pallbearers had carried the wooden coffin holding Benedict's remains out of St. Peter's Basilica and placed it on the ground before the largest church in Christendom.
In his homily read from the same spot, Francis used more than a dozen biblical references and Church writings in which he appeared to compare Benedict to Jesus, including his last word before he died on the cross: "Father, into your hands I commend my spirit."
Applause broke out across the vast, cobbled esplanade, which was shrouded in mist, in a sign of respect for Benedict, a hero to Roman Catholic conservatives who shocked the world by resigning nearly a decade ago.
At the end of the service, Francis made the sign of the cross over Benedict's coffin and bowed his head, before 12 besuited pallbearers carried it into St Peter's Basilica.
Benedict will be interred in a tomb in the crypt beneath the basilica, where John Paul II's body lay in state before it was moved for his beatification in 2011. He was made a saint in 2014.
Born Joseph Ratzinger, the ex-pope had not been a head of state for a decade, but world leaders including German Chancellor Olaf Scholz and Italian Prime Minister Giorgia Meloni were among those in attendance.
An estimated 50,000 people were in the square for the funeral, according to police, many of them having queued up since dawn to bid farewell.
"Benedict is a bit like my father, so I had to pay homage to him," said Cristina Grisanti, a 59-year-old from Milan, who hailed the former pope's "purity, his candor, his mildness".
An estimated 195,000 people had already paid their respects earlier when the body lay in state.
Benedict was the first German pope in 1,000 years and church bells rang out across Germany as the funeral finished on Thursday, while many Germans were also at the Vatican.
"We owe him so much. We want to show that we stand behind him," said Benedikt Rothweiler, 34, who came from Aachen with his family.
"We actually know too little about Benedict. He always accepted everything the way God wants it. This is a good example for us humans."
- Two popes -
Benedict was a brilliant theologian but a divisive figure who alienated many Catholics with his staunch defense of conservative doctrine on issues such as abortion.
His eight years as head of the worldwide Catholic Church was also marked by crises, from in-fighting within the Vatican to the global scandal of clerical sex abuse and its cover-up.
When he quit, Benedict said he no longer had the "strength of mind and body" necessary for the task, retiring to a quiet life in a monastery in the Vatican gardens.
His death brought an end to an unprecedented situation of having two "men in white" -- he and Francis -- living in the tiny city state.
He and Francis, an Argentine Jesuit, were said to get on well, but Benedict's later interventions meant he stayed a standard-bearer for conservative Catholics who did not like his successor's more liberal stance.
The last time a pope presided over the funeral of his predecessor was in 1802, when Pius VII led the ceremony for Pius VI -- but the circumstances were very different.
Pius VI died in 1799 in exile, a prisoner of France, and was buried in Valence. His successor had his remains exhumed and brought back to Italy, before he was treated to a papal funeral at St Peter's.
- European royals -
Beyond St Peter's, members of the Roman Catholic Church followed the funeral proceedings on television and the radio.
In the majority Catholic Philippines, churches held requiem masses for the former pontiff, including at Malolos Cathedral near the capital Manila.
"This is an unexplainable feeling to witness this," said Cherry Castro, 67, who was among around 500 gathered for the special ceremony.
Portugal declared a national day of mourning on Thursday, while in Italy, flags were flown at half-mast on public buildings.
The only official delegations were from Germany and Italy.
But other dignitaries, including Belgian and Spanish royals, the presidents of Lithuania, Poland, Portugal, Hungary, Slovenia and Togo, and the premiers of the Czech Republic, Gabon and Slovakia among others attended in a personal capacity.
The service followed traditional papal funerals, with a few changes to prayers and readings to reflect Benedict's status as emeritus pope.
As is traditional, coins and medals minted during his papacy and a written text describing his pontificate, sealed in a metal cylinder, will be placed alongside his body.
This report was prepared with data sourced from Reuters and Agence France-Presse.