Edward, 3rd Baron Montagu of Beaulieu, Hampshire, died on 31 August aged 88, following a short illness.
He is survived by his wife Fiona, son and heir Ralph, daughter Mary and second son Jonathan.
The funeral took place at Beaulieu Abbey Church at 15:00 BST. The estate's visitor attractions were closed all day as a mark of respect.
Lord Montagu founded the National Motor Museum on the 7,000-acre (2,800-hectare) estate as a tribute to his motoring pioneer father, John.
In 1952 he opened his home, Palace House, to the public.
He also became the first chairman of English Heritage, the Historic Buildings and Monuments Commission, in 1983 and served until 1992.
Beaulieu Estate said members of the public were welcome at the funeral, however places in the church were reserved for family and friends.
The funeral hearse left Palace House at about 14:40 BST, before passing through the village.
Lord Montagu requested donations be made to the National Motor Museum Trust and the Countryside Education Trust, the estate said.
A memorial service is also expected to be held at St Margaret's in Westminster at a date yet to be set.
Lord Montagu studied at Eton and then Oxford, after service as a lieutenant in the Grenadier Guards.
In 1948, when he was still in the army, he made his maiden speech in the House of Lords.
At the age of two he succeeded his father to become the 3rd Baron and took over the running of the estate on his 25th birthday in 1951.
The estate and visitor attractions will continue to operate as usual.
The funeral of Lord Montagu, who established the National Motor Museum at Beaulieu, has been held.