"The world will long remember [Kennedy] as the heir to a weighty legacy; a champion for those who had none; the soul of the Democratic Party; and the lion of the US senate - a man whose name graces nearly 1,000 laws, and who penned more than 300 himself," Obama said.
The funeral was attended by both political allies and rivals of Kennedy, along with three generations of the famed Irish-American clan.
The senator's son, Ted Kennedy Jr, who lost a leg from cancer at the age of 12, saluted his father as his greatest source of love and encouragement through tough times.
"He was not perfect - far from it. But my father believed in redemption and he never surrendered, never stopped trying to right wrongs, either as a result of his own
failings or ours," he said.
Kennedy died on Tuesday night, aged 77, after battling brain cancer for more than a year.
At a graveside at Arlington enveloped in deepening darkness, Cardinal Theodore McCarrick offered sympathies to Kennedy relatives and "an extended family that must probably include most of America".
A squad of seven riflemen fired three volleys in a traditional military funeral ritual, and a bugler sounded taps as lightning flickered across the sky.
Kennedy's death was a national event, signalling the end of a half-century era in which his family was a highly influential force in the Democratic party.
Crowds lined in the streets in both Boston and Washington as his hearse passed.
Some mourners held signs urging legislators to approve the currently debated healthcare plan in Kennedy's honour.
Al Jazeera's Nick Spicer, reporting from Boston, said Obama would miss Kennedy's influence in the ongoing healthcare debate.
"[Obama] mentioned how Ted Kennedy acted as a lawmaker, as a man who was able to bring together both sides in the senate so they would focus on a higher public good," he said.
|Crowds lined the street to pay tribute to Kennedy as his hearse passed [AFP]
"This was not a direct critique of the polarised nature of American politics ... but if we look at the current political situation faced by Obama in the senate and his giant legislative project of overhauling America's health system, I think that is almost a commentary on how he would like things to happen and how much he will miss Ted Kennedy's presence.
"Healthcare was really the cause of Ted Kennedy's life."
Taylor Marsch, a political analyst, said that an ability to work across party lines in the senate was one of Kennedy's greatest strengths.
"He always tried to find common ground, with people who don't agree but maybe finding one tenet that you can move legislation forward so that America can be better because of it. And he really gave his life to that,' she told Al Jazeera.
"He was very important to the Democratic Party but especially for the foundation of what we fight for all over our world... He believed in human rights and civil rights for everyone."
Tens of thousands of people queued to view Kennedy's coffin on Thursday and Friday at the John F Kennedy Presidential Library, built on Boston's Atlantic shore by Edward Kennedy to commemorate his assassinated brother.