Close family and friends of the Pulitzer Prize-winning novelist, who died on Friday aged 89, gathered for a church service in Monroeville.
To Kill a Mockingbird, about racial intolerance in the Deep South, sold more than 40m copies worldwide.
Lee released the sequel, Go Set a Watchman, in 2015 - 55 years later.
A statement from her family confirmed the acclaimed author had died in her sleep on Friday morning.
The funeral service was held at First United Methodist Church in Monroeville on Saturday, with history professor Wayne Flynt, a long-time friend, delivering the eulogy.
She was then laid to rest at her family burial plot, alongside her father and sister, Alice Lee.
The author used Monroeville as a model for the imaginary town of Maycomb, the setting of To Kill a Mockingbird.
The book remains a towering presence in American literature, telling the tale of a white lawyer defending a black man accused of rape.
5,000
copies in initial print run
$20,000
value of a signed first-edition copy
Over 40m global sales
40 languages into which it has been translated
8 Oscar nominations for 1962 film version
3 Oscar wins
In the small fictional town of Maycomb in the depression-ravaged American South, a black man named Tom Robinson is falsely accused of raping a white woman.
A lawyer named Atticus Finch defends Robinson in court. The frenzy stirred up by the case and her father's quest for justice are seen through the eyes of Finch's six-year-old daughter Scout.
The book explores issues of race, class and the loss of innocence.
"You never really understand a person until you consider things from his point of viewâ€¦ until you climb into his skin and walk around in it." - Atticus Finch to Scout.
"It was times like these when I thought my father, who hated guns and had never been to any wars, was the bravest man who ever lived." - Scout Finch.
In 1962, it was made into a film starring Gregory Peck as Atticus Finch and Mary Badham as Scout.  The novel is currently being adapted for the stage.
Why is To Kill a Mockingbird so popular?
Harper Lee, the author of To Kill a Mockingbird, has been buried in a private funeral in her hometown in the US state of Alabama.