His brother Michael Haines walked hand-in-hand to Perth Congregational Church today with Barbara Henning, whose husband Alan was killed by the militants in Syria earlier this month.
Mourners were told to wear bright colors, rather than black, in celebration of Haines' life.
In a letter published in the Guardian newspaper, Barbara Henning and Michael Haines urged people of all backgrounds "to find a single act of unity one simple gesture, one act, one moment that draws people together."
David Haines, a 44-year old former air force engineer, was working for the ACTED agency helping refugees from the Syrian civil war when he was abducted in March 2013 near the Turkish border. A video of his killing was released last month.
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In a video message released before the service, Michael Haines remembered his brother as "a man full of kindness, open and caring, willing to cross the road to help others."
IS militants have also killed US reporter James Foley and American-Israeli journalist Steven Sotloff, and threatened another American, Abdul-Rahman Kassig. The group also holds British photojournalist John Cantlie.