There were minor clashes as Chokri Belaid’s coffin was carried through Tunis, but the event was largely peaceful.
Sporadic protests and clashes have been reported all around Tunisia, and many workers are observing a general strike.
Unions say the Islamist-led government is to blame for the killing, an accusation it denies.
PM Hamadi Jebali has tried to defuse tension by calling for a non-partisan technocratic government. However, his governing Ennahda party has refused to accept this.
Some 3,000 people initially gathered outside the building in the Djebel Jelloud suburb of Tunis where Chokri Belaid’s flower-covered coffin lay.
Crowds chanted slogans accusing the government of murdering Chokri Belaid, 48.
“With our blood and our souls we will sacrifice ourselves for the martyr,” the mourners shouted.
Thousands more people then joined the coffin as it was taken on a funeral procession toward the nearby cemetery of el-Jellaz.
Many more people are expected to take to the streets of the capital after Friday prayers and ahead of the burial in the afternoon.
Hundreds of riot police have been deployed in Habib Bourguiba Avenue, the scene of earlier violence.
Police fired tear gas to break up youths attacking cars close to el-Jellaz cemetery, and also at protesters near the interior ministry.
Elsewhere in Tunis, many shops are shut and most public transport is not running.
This is the first general strike in 35 years.
A number of flights to and from Tunis-Carthage airport have been cancelled.
Tunisian state television said universities had been ordered to suspend lectures on Saturday and Sunday, while France said it would close its schools in Tunis.
In the city of Sidi Bouzid, some 10,000 people also gathered to mourn Chokri Belaid.
In the central town of Gafsa, tear gas was fired amid clashes between protesters and security forces, witnesses and local media said.
Tension had been simmering for many months between liberal, secular Tunisians and the Islamist-led government.
Critics say that Ennahda has allowed ultra-conservative Muslim groups to impose their will on a bastion of Arab secularism.
Chokri Belaid was the victim of the first political assassination in Tunisia since the Arab Spring uprising in 2011.
Thousands of people later rallied outside the interior ministry in Tunis, many chanting slogans urging the government to stand down and calling for a new revolution.
In the centre of the capital, a police officer was killed during clashes between police and opposition supporters.
Also on Thursday, demonstrators observing a symbolic funeral for Chokri Belaid outside the governor’s office in Gafsa clashed with police.
One policeman was said to be in a coma on Friday after being dragged from his car and beaten in the town, the AFP news agency reported.
In Sfax, crowds ransacked a number of shops on Thursday.
Tunisian media reported that more than a dozen Ennahda offices across the country were attacked overnight.
Earlier, four opposition groups – including Chokri Belaid’s Popular Front – announced that they were pulling out of the country’s constituent assembly in protest.
Chokri Belaid was a respected human rights lawyer and left-wing secular opponent of the government which took power after the overthrow of long-serving ruler Zine el-Abidine Ben Ali.
Current President Moncef Marzouki said the assassination should not affect Tunisia’s revolution. He cut short a visit to France and cancelled a trip to Egypt to return home to deal with the crisis.
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