Security was tight in southwestern Baluchistan province, where the crowd gathered at a sports stadium in memory of Nawab Akbar Bugti, who was killed in a military operation on Saturday.
"Death to Pakistan's army" and "Pakistan will disintegrate, Pakistan will no longer exist" were chanted by the protesters during the service.
Witnesses said police contingents ringed the stadium in the provincial capital of Quetta and troops were standing by on alert.
"It is a big tragedy. Bugti has become a legend," 22-year-old clan member Dad Mohammad told AFP.
"He fought for the rights of ethnic Baluch. He had set a course for the Baluchis -- it is now up to the people," said another tribesman, Slaim Shahwani, 25.
Rebels blow up pipeline
Earlier, suspected rebels blew up a gas pipeline and electricity pylons in gas-rich Baluchistan.
The attacks appeared to be the first by the rebels since Bugti was killed.
The attackers used high explosives to blow up the pipeline and power pylons outside the city of Qalat, cutting its gas and power supplies.
"These were strong explosions. A 12-foot (3.6-metre) long piece of the pipeline was blown away," said a police officer in the city.
After the funeral prayers were held, mobs launched a fourth day of rioting in southwestern Pakistan, smashing windows and burning a security guard post.
Afghanistan offers condolences
Afghanistan later offered condolences to Bugti's family.
"We regret his death and we offer our condolences to the family of late Bugti," said a spokesman for Afghan President Hamid Karzai.
Speaking at a press conference, spokesman Mohammad Karim Rahimi described Bugti as an "influential, famous Baluch tribal leader."
Controversial figure
Bugti, who was in his eighties, was a controversial but powerful figure who dominated Baluch politics for decades.
He led a campaign for greater Baluch control over the region's gas
resources, and his insurgency has left hundreds of people dead since 2004.
He had been accused of running a feudal justice system complete with private jails, and had also been blamed for the deaths of scores of police and soldiers.
Bugti was killed in a military assault on a mountain hideout, sparking two days of rioting across Baluchistan.
More than 500 people were arrested and two people died in the violence, which saw mobs ransack and torch buildings, and a general strike called by Baluch nationalists.
Officials said Bugti's body has not yet been recovered from the cave which coallpsed during a heavy exchange of fire between security forces and his armed men.
Efforts were ongoing to retrieve the body for burial in his ancestral
graveyard.
Bugti's son-in-law Senator Agha Shahid said that the family approached the ruling party for help in getting the body but that so far there had been no response.
Analysts have described the killing of Bugti as a blunder by the government and have warned it could radicalise the Baluch people and intensify the insurgency.