Milosz, who won the Nobel Literature Prize in 1980, died on August 14 at the age of 93 at his home in the southern city of Krakow.
He was buried in the crypt of the Skalka monastery in Krakow, alongside painter Jacek Malczewski, dramatist and painter Stanislaw Wyspianski, composer Karol Szymanowski and other members of Poland's cultural elite.
His coffin was carried through the streets of Krakow, after a nationally-broadcast mass at St Mary's Church in the city's medieval main square.
Thousands of people packed into the church as Krakow's Archbishop Franciszek Macharski read a message from Polish Pope John-Paul II, who said that in the last years of his life Milosz had come closer to Catholic orthodoxy and shared the pope's objectives. The message from the pope, who enjoys moral and political authority in his home country, was an apparent move to ease outrage among Polish ultra-Catholics and nationalists over the decision to bury Milosz with Poland's cultural elite.
"I am happy to be able to confirm his words on the common objective. I repeat it today as a memento," the pope said.
Milosz was only buried after several days of arguing between ultra-Catholic nationalists and liberals over where he should be buried.
His opponents criticise him for having served as a diplomat for Communist Poland between 1946 and 1950, for having described himself as Lithuanian - he was born in what is now Lithuania in 1911 - and for criticising some aspects of Polish Catholicism.
In a homily during the service Monsignor Jozef Zycinski said Milosz had been "fascinated by God" and had himself translated from Hebrew the Book of Psalms.
Daily newspaper Nasz Dziennik, which has close links with ultra-Catholic radio station Radio Maryja, described Milosz as a "Communist sympathiser" who "backed Poland's membership of the Soviet Union".
Milosz had described the Bible as a "cruel and depressing book", the paper said.
Several Polish intellectuals leapt to his defence in open letters published in the media, describing Milosz as the "greatest Polish poet of the 20th century".
Current and former prime ministers Marek Belka and Tadeusz Mazowiecki attended the funeral, alongside the former president and historical leader of the Solidarity trade union, Lech Walesa.
Considered to be one of the major poets of the 20th century, Milosz was the author of "Captive Thought", about intellectuals' admiration for totalitarian ideologies.
He was born in 1911 in what was then a province of Tsarist Russia, when the country was home to many ethnic Lithuanians, Poles, Jews and Germans.
He described himself as "Lithuanian", as did Poland's other great Romantic poet Adam Mickiewicz.
After his exile from Communist Poland in 1951, Milosz spent many years living in France and the United States before settling down in Krakow at the beginning of the 1990s.
His burial was also marked in a ceremony in Vilnius, the Lithuanian capital, where he grew up and which made him an honorary citizenship in 2001.