Bodies of the victims arrived at the stadium in a procession through Chapeco after arriving from Colombia.
Seventy-one people died in Monday's crash outside Medellin where the team was due to play. Six survived.
The cause of the crash is unclear. But a recording suggests the plane was out of fuel moments before the crash.
Brazilian President Michel Temer attended the ceremony at the stadium. He watched silently but did not address the crowd.
A black sash was hung on the stadium's outer wall. Giant screens transmitted the speeches to those watching outside in the pouring rain.
Inside, young supporters carried the team's flag out on to the pitch, alongside the national flags of Brazil and Colombia.
The mayor of Chapeco, Luciano Buligon, started his speech by comparing the rain to God's tears.
He was dressed in a shirt of Colombian side Atletico Nacional, the team Chapecoense had been travelling to play, and who held a memorial for the victims in their own stadium on Wednesday.
The victims' families circled the pitch. Posters of the deceased players were held in the air, and an announcer repeated each one's name over the loudspeaker.
"The feeling is horrible, to watch and know, that my son is going to enter here in a coffin," said Ilaide Padilha, the mother of goalkeeper Marcos Danilo Padilha, before the event.
Mrs Padilha told the Brazilian press earlier in the week that she felt like she had lost one son but gained thousands, owing to the outpouring of support across the nation.
Mourning has been centred around the Conda Arena since the plane crash, with fans of the Chapecoense club clinging to the stadium as to the memories of the football team.
The pain climaxed at the open-air wake. The coffins of 50 victims were brought into the stadium that had been a second home to many of them.
Tens of thousands came to bid farewell, despite the heavy rain that poured over Chapeco during the service, with gloomy grey skies taking over after a week of bright sunny days.
The caskets were draped in Chapecoense flags, as were many of the fans. The grief of the families was heartbreaking. A little girl gently caressed her father's picture, clinging to the frame.
On the stands, the man next to me wept like a child, wiping his tears with a Chapecoense scarf. He told me he and his nine-year-old son had attend all of the team's matches this year except one.
It's a common story here in Chapeco. The team was a son of the city, and the city joins the families in mourning.
The victims of the crash include 64 Brazilians, five Bolivians, a Venezuelan and a Paraguayan.
Nineteen of the dead were players with Chapecoense. Many more were support staff and journalists covering the team.
A minute's silence will be held before every football match this weekend.
Football's world governing body Fifa, whose head Gianni Infantino attended the service in Chapeco, requested that all players wear black armbands in remembrance.
The team has been described as having "a fairy story with a tragic ending".
It only won promotion to Brazil's top division in 2014, but was on its way to the first leg of the Copa Sudamericana final in Medellin when the plane went down.

2 March 2016 Last updated at 15:49 GMT
Being in space weakens your muscles so the pair needed to be helped from their capsule after it landed at around 4.30am this morning.
Their 340-day mission aboard the International Space Station was twice the length of a normal stay.
Now that they're back home they'll take part in studies to learn about the effects of spaceflight on the body.
American space agency Nasa says the research will help them prepare to one day send humans to Mars.
Thousands of fans have gathered at Brazil's Chapecoense stadium to pay tribute to those killed when the football team's plane crashed.
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The US astronaut Scott Kelly and Russian cosmonaut Mikhail Kornienko have returned to Earth after spending almost a year in space on board the International Space Station.