Vikki Thompson, 21, died at Armley jail, near Leeds, on 13 November. She had said she would kill herself if sent to a male prison.
She was in custody awaiting sentencing for robbery and was being held in a single-occupancy cell at HMP Leeds.
Family and supporters gathered at Oakworth Crematorium, near Keighley, West Yorkshire, to pay their respects.
Updates on this story and others from around West Yorkshire
Speaking after the funeral, Alex Kaye, of transgender support group SafeT, said: "It's a tragedy that shouldn't have happened.
"It's unjust and it's an unbelievable time for people who knew Vikki.
"It signifies a time for change, a very important change that has to happen."
Ms Thompson's death prompted calls for a shake-up of the way transgender prisoners are handled by authorities.
Justice Department minister Lord Faulks said the policy regarding transgender prisoners was currently under review.
A post-mortem examination found the cause of Ms Thompson's death was thought to be hanging.
The funeral of a transgender woman who was found dead at a male prison has taken place.