Sharif, 83, died on Friday of a heart attack in an upmarket Cairo clinic after a struggle with Alzheimer's disease.
The funeral was held at the grand mosque of Mushir Tantawi in an eastern neighbourhood of the Egyptian capital, where key religious ceremonies are often held.
Sharif's remains will be buried later at El Sayeda Nafisa cemetery in the city's south.
The service was attended by a group of Sharif's relatives, friends and Egyptian actors, an AFP correspondent reported.
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Journalists outnumbered mourners, and there was no sign of any top government officials or Hollywood stars at the memorial service.
"Omar Sharif represented Egypt to the world in the best possible way," said Hussein Fahmy, a popular Egyptian actor who attended the funeral.
Zahi Hawass, the prominent archaeologist and former Egyptian antiquities minister, said he had "lost a close friend" while "the world lost a great actor".
Sharif's death came six months after that of his ex-wife and iconic Egyptian actress, Faten Hamama, known as the "Lady of the Arabic Screen".
The couple had a son, Tarek, who was deeply emotional during today's funeral.
They divorced in 1974 when Sharif, already famous in his homeland, launched a career in Hollywood.
He never remarried.
The winner of two Golden Globe awards and an Oscar nomination for his role as Sherif Ali in David Lean's 1962 epic "Lawrence of Arabia," Sharif captivated audiences worldwide for more than half a century.
Sharif was known for his debonair style, raffish good looks and often mischievous joie de vivre, but he will be remembered forever as the eponymous "Doctor Zhivago".
"He was handsome, sophisticated and charming. He was a proud Egyptian," American star Barbra Streisand, who starred alongside Sharif in 1968's "Funny Girl", wrote on Facebook.
"I feel lucky to have had the opportunity to work with Omar, and I'm profoundly sad to hear of his passing."
Fluent in six languages and also famous for his skills at playing the card game bridge, Sharif began acting in the 1950s.