Ahmed Wali Karzai was for years dogged by allegations of links to the drugs trade and corruption, but his death is a huge blow for NATO and the government, who made him the key powerbroker in the south and threatens to fan insecurity.
Underlining those fears, the governor of neighbouring province Helmand, also a hotbed of Taliban activity, escaped unhurt with his provincial intelligence chief when a bomb attack targeted their convoy en route to the funeral.
Prayers were held at the Mandigak Palace, a government guesthouse, before the body was driven 30 minutes to the family village of Karz, followed by the president's delegation and filled with turbaned tribesmen.
The Afghan leader cried openly during the burial, at one point climbing inside the grave to help move his brother's body and kissing his forehead as the corpse was lowered into the ground.
Friends and officials tried to calm Karzai and help him out, but he stayed inside the grave and many in the surrounding crowd were also in tears, said an AFP reporter at the scene.
Two trees symbolising patience and strength were planted next to the family plot, where Karzai's ancestors have also been laid to rest.
The president left the graveyard in tears, helped into his armoured car by former Kandahar governor Gul Agha Sherzai and other officials.
Security, already tight in violent Kandahar province, was stepped up significantly for the funeral with police and soldiers deployed en masse, with the main thoroughfares closed to traffic and largely free of pedestrians.
The venue where Wali Karzai's body was held overnight was taken over by President Karzai's personal security force, as well as Afghan and US troops who guarded the area with light and heavy weapons, an AFP reporter said.US Secretary of State Hillary Clinton telephoned the Afghan president to offer her condolences and said Washington remained "committed to supporting the government and people of Afghanistan in their struggle for peace".
Speculation has continued to mount about the motive behind Tuesday's shooting of the younger Karzai, who was 49 and the president's half-brother, in his own home by seemingly trusted aide.
The Taliban claimed to have recruited the gunman, but there was doubt after the regional police chief and other officials identified the assassin as the long-serving chief of his family's personal protection force.