The 25-year-old batsman died at a hospital in Sydney last week after he was hit on the back of the neck by a cricket ball during New South Wales' first-class match against South Australia.
He had scored 63 runs when he was hit by a short ball from bowler Sean Abbott and was wearing a helmet at the time.
Around 1,000 people, mostly locals, packed into his former Macksville High School for the service, with hundreds more watching on big screens outside.
The service was also broadcast live on national television and on big screens in Australia's major cities, including at the Sydney Cricket Ground where Hughes was fatally injured.
Hughes' siblings, Jason and Megan, paid tribute to their brother during the service on behalf of the family along with his cousin Nino Ramunno.
Megan said: "I'm sorry you cannot be here with us any longer, but I promise that all the dreams and thoughts we had about the future I will continue in your honor.
"There won't be a day that goes by that I won't think of you, I promise I will talk to you every day and keep you company up there."
By Ruchi Singh
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