State television showed several high-ranking Iranian officials, including Defence Minister Amir Hatami and Revolutionary Guards chief Hossein Salami, at the funeral of Fakhrizadeh, whose coffin was covered in the Iranian flag.
The scientist died on Friday after being seriously wounded when assailants targeted his car and engaged in a gunfight with his bodyguards outside Tehran, according to Iran's defence ministry.
The funeral got underway with a religious singer praising Fakhrizadeh and alluding to the martyrdom Imam Hossein, revered 7th century holy figure from whom Shiite Muslims draw inspiration.
A large display showed a picture of Fakhrizadeh next to Iran's supreme leader Ayatollah Ali Khamenei, as well as former top general Qasem Soleimani, who was killed in a January air strike by the US in Baghdad.
The funeral was not open to the public in order to maintain health protocols over the novel coronavirus pandemic, according to the defence ministry.
As part of the procession before the funeral, Fakhrizadeh's remains were taken to holy Shiite shrines in the northeastern city of Mashhad and Qom in central Iran, as well as the shrine of the founder of the Islamic republic, Ruhollah Khomeini in Tehran.
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Iran's President Hassan Rouhani has accused arch-foe Israel of acting as a US "mercenary" in killing Fakhrizadeh, and supreme leader Khamenei has called for the perpetrators to be punished.