The two-day funeral was planned by Muhammad Ali in the years before his death, according to a family spokesman.
Muhammad Ali, “The Greatest”, wanted the Muslim prayer service, known as a Jenazah, to be “a teaching moment”, according to Imam Zaid Shakir, who is leading the service.
The legendary boxer died on June 3 at the age of 74.
More than 14,000 people have tickets to the event at the site of Muhammad Ali’s last fight in Louisville in 1961.
American Muslims attending the service and watching on TV say they hope that the public prayers will help Americans to become more familiar with Islam and its practices.
In 1964, Muhammad Ali famously converted to Islam, changing his name from Cassius Clay, which he called his “slave name”.
He first joined the Nation of Islam, a controversial black separatist movement, before later converting to mainstream Islam.
Muhammad Ali traveled the world as a boxer and speaker, and inspired Muslims around the world.
The funeral will continue on June 10 with an interfaith memorial service and procession through Louisville passing key locations such as Muhammad Ali’s childhood home, and a museum dedicated to him.
Tickets to attend the June 10 service sold out only an hour after they went on sale.
World leaders and celebrities will attend, including former President Bill Clinton and Turkish President Recep Tayyip Erdogan. President Barack Obama will not be able to attend due to his eldest daughter’s graduation on the same day.
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