Doors opened at St Paul’s Cathedral at 9am but crowds gathered much earlier to get a glimpse of the procession ahead of the send-off.
As the coffin made its way up Whitehall, throngs of sombre well-wishers clapped gently.
As the hearse arrived at St Clement Danes, the coffin was taken into the church, ready to be transferred to a gun carriage to be taken to St Paul’s.
A white floral arrangement on top of the funeral bore a card reading: ‘Beloved mother, always in our hearts’.
At St Clement Danes, prayers were by resident chaplain the Rev David Osborn.
At St Paul’s The Duchess of York and Sir Terry Wogan, and Falklands vet Simon Weston were among the first of more than 2,000 mourners to arrive.
Former Prime Ministers John Major, Tony Blair and Gordon Brown also took their seats for the service.
Labour leader Ed Miliband and his wife Justine stopped to speak to members of the clergy as the entered the cathedral.
Also taking their seats were Deputy Prime Minister and Liberal Democrat leader Nick Clegg, alongside his wife Miriam Gonzalez.
Past and present Tory politicians were attending today’s service including Lord Heseltine, Michael Portillo and Foreign Secretary William Hague.
Welsh classical singer Katherine Jenkins has also arrived at the for the service.
Former Lib Dem leader Paddy Ashdown told Sky News: ‘We’re a great nation and I think we should honour those people who have made a great contribution and Mrs Thatcher was undoubtedly that.
Many Maggie fans stayed all through the night outside the iconic cathedral while more flocked to the capital early this morning.
They braved the early morning rain amid a sea of Union flags while awaiting the arrival of her coffin.
Speaking this morning David Cameron said the lavish funeral was a “fitting tribute” to his predecessor.
He urged protesters to show ‘respect’ during the event, even though they may have disagreed with her policies.
Mr Cameron told BBC Radio 4’s Today programme: ‘I think it will be quite a sombre event but it is a fitting tribute to a great prime minister, respected around the world.
‘I think other countries in the world would think Britain had got it completely wrong if we didn’t mark this in a proper way.’
Margaret Kittle, 79, said she travelled from Canada for the funeral as soon as she heard of the Iron Lady’s death, taking up her position outside the historic landmark at 8am yesterday.
‘It was a cold night, the damp goes through you,’ she said. ‘But I always said I would come to the UK for Margaret Thatcher’s funeral because I respect her.
‘I think she did a lot for the world. She was an intelligent lady – a chemist and a lawyer – and a lovely lady as well. Apparently she always made her husband Dennis’s breakfast.’
She added: ‘We will never see the likes of Mrs Thatcher again.’
A small group of protesters arrived this morning to demonstrate against the ‘glorifying’ of Lady Thatcher’s funeral and cuts to the welfare state.
Teams of police also arrived on the Strand at 7am and had closed the road to traffic by 8am.
Officers would be placed at intervals of 10 metres – or seven barriers – along the whole route, with more at crossings, one said.
Others patrolled the road on motorbike and horseback, with more on the pavements on foot.
Student protestor Dave Winslow, 22, held a placard reading ‘Rest of us in Poverty’.
‘We plan to turn our backs,’ he said.
‘We want to maintain a dignified protest, it’s counter-productive to cat call and sing Ding Dong The Witch Is Dead.
‘The message is that spending £10 million on such a divisive figure in times of austerity, especially when austerity is being imposed on the poor, is wrong, especially when harm is being caused to the disabled and the NHS.
‘I think quite a few disabled people have died since being pushed into jobs they’re unsuitable for.
‘I have a friend up north who skips meals in order to feed a child.
‘The working class are really being crushed by the rising costs of living and welfare cuts.
‘The Government wants to glorify this. It is a massive propaganda campaign to idolise Margaret Thatcher.’