Several thousand mourners queued up to quietly file past Gorbachev's open casket as it was flanked by honour guards under the Russian flag in the historic Hall of Columns.
The hall has long been used for the funerals of high officials in Russia and was where the body of Joseph Stalin first lay in state during four days of national mourning after his death in 1953.
After several hours the coffin was taken out of the hall in a procession led by Dmitry Muratov, the Nobel Peace Prize-winning editor-in-chief of independent newspaper Novaya Gazeta, which Gorbachev helped found.
The coffin was taken to Moscow's prestigious Novodevichy Cemetery, where it was lowered into the grave to the sounds of a military band playing the Russian national anthem and a gun salute.
Gorbachev was buried next to his wife Raisa, who died from cancer in 1999.
With Russia facing increasing international isolation over its military action in Ukraine, many of those in attendance at the hall pointed to Gorbachev's opening of the country to the rest of the world.
"It was a breath of freedom, which was lacking for a long time, an absence of fear," 41-year-old translator Ksenia Zhupanova said at the entrance to the hall.
"I am against shutting us out from the outside world, I am for openness, for dialogue. This is what Mikhail Sergeyevich showed the world," she said, using Gorbachev's patronymic.
The mourners were of all ages, some old enough to remember the years of Soviet stagnation before Gorbachev came to power, others young enough to have only lived in Russia under Putin.
The Kremlin had said Putin would not attend Saturday's funeral due to his "work schedule".
Gorbachev died on Tuesday at the age of 91 following a "serious and long illness", the hospital where he was treated said.
In power between 1985 and 1991, he sought to transform the Soviet Union with democratic reforms, but eventually triggered its demise.
One of the great political figures of the 20th century, he was lionised in the West for helping to end the Cold War and trying to change the USSR.
But many in Russia despised him for the economic chaos and loss of global influence that followed the Soviet collapse.
Orban in attendance
He had spent most of the last few decades out of the political limelight and his death this week was barely acknowledged in official circles in Russia.
State television on Thursday showed images of Putin, alone, laying a bouquet of red roses near Gorbachev's open casket at the hospital where he died.
Putin had a call with Turkish President Recep Tayyip Erdogan on Saturday, the Kremlin said, during which the two discussed Ukraine and Erdogan passed on his condolences for Gorbachev's death.
The only senior foreign figure to attend was Hungarian Prime Minister Viktor Orban, who laid flowers at the casket.
"Many things were needed for Central Europe to get rid of Communism peacefully, without loss of life or bloodshed. One of them was Mikhail Gorbachev. God rest his soul!" Orban said in a post on Facebook.
Before the Ukraine conflict, Orban had one of the closest relationships with Putin of any EU leader, but the Kremlin said there were no talks planned during his visit to Moscow.
After Gorbachev's death, tributes poured in from Western capitals, where he is remembered for allowing countries in Eastern Europe to free themselves from Soviet domination and for signing a landmark nuclear arms reduction pact with the United States.
Known affectionately in the West as "Gorby", he was awarded the Nobel Peace Prize in 1990.
Berlin flags at half-mast
Flags were also flying at half-mast in Berlin on Saturday, in memory of the man who held back Soviet troops as the Berlin Wall fell in 1989.
In Russia, Gorbachev's steps towards peace and reform have been overshadowed by the economic troubles that followed the fall of the Soviet Union.
Putin, who called the Soviet collapse the greatest geopolitical catastrophe of the 20th century, has spent much of his more than 20-year rule reversing parts of Gorbachev's legacy.
By cracking down on independent media and political opposition, critics say, Putin has worked to undo Gorbachev's efforts to bring "glasnost", or openness, to the Soviet system.
And with the launch earlier this year of the military campaign in Ukraine, he has sought to reassert Russian influence in one of the countries that won its independence when the Soviet Union fell apart.
On the streets of Moscow this week some expressed their continued anger and bitterness at Gorbachev, but those who turned up for Saturday's funeral paid tribute to his legacy.
"(Gorbachev) helped the development of the country, the bringing of freedom of speech and freedom of thought," said 19-year-old Irina Kaplanova.
He was not an "absolutely ideal politician", she said, but was "a great reformer, and a person who acted in accordance with their conscience and knew how to admit mistakes".