Indian-born Jacintha Saldanha, 46, apparently committed suicide after answering the telephone call from Australian radio DJs to the hospital where the pregnant Duchess of Cambridge was admitted with acute morning sickness.
Saldanha's husband Benedict Barboza and their son, 16, and daughter, 14, were joined by relatives and local residents for an emotional service of hymns and prayers conducted in the regional Konkani language.
Her coffin, covered with flowers and with a photographic portrait on top, was carried out of the Our Lady of the Health church in Shirva, 30 miles (50 kilometres) from Mangalore city, and buried in the cemetery.
"Benedict has become a widower and her children are motherless. Let us pray for her soul," Ronald Saldanha, a relative of the family, said in the church address.
Saldanha's coffin was taken first to her mother-in-law's house where female mourners chanted and sang commemorative songs, before it was presented in the church ahead of the service to let people file past and bid farewell.
"This is a sad moment. Nothing else, just grief," M. Menezes, a computer professional on Christmas leave from his job in the Gulf, told AFP after paying his final respects in the church below stained-glass windows and spinning fans.
Family members in the town were unwilling to speak to reporters after a week of intense media scrutiny following the news of her death.
Television crews jostled to film the service through the main door of the church and to get footage of the burial as crowds gathered behind ropes to watch the coffin being lowered into the ground.
Barboza hugged his son and daughter at the graveside as the burial rites were concluded and a brass band played a final hymn.
The grave was marked with a simple black-and-white cross bearing Saldanha's name and dates of her birth and death.
On Saturday, after a memorial mass in London's Westminster Cathedral, her daughter had read out a tribute.
"We will miss your laughter, the loving memories and the good times we had together. The house is an empty dwelling without your presence," she said.
Shirva is Barboza's home town while several of Saldanha's relatives, including her frail mother, live in the port city of Mangalore.
Some locals said they identified closely with the family since many workers leave the area to take jobs in Britain or the Gulf countries as nurses, engineers and mechanics, often sending most of their wages home.
John Rodrigues, who returned to Shirva after working in the oil and gas sector in the Middle East, said there was still "a lot of confusion in people's minds over how she died".
A London inquest last week heard that she had been found hanged in staff accommodation on December 7 and there were no suspicious circumstances over her death.
A few days earlier the nurse put the hoax call through to a colleague, who relayed confidential details about the health of Prince William's wife Catherine to the Australian DJs.
Saldanha left three notes, one of which reportedly criticised colleagues over her treatment at the King Edward VII private hospital.
The hospital has defended itself, saying it offered support to Saldanha and had stressed to her she would not be disciplined for being taken in by what it described as a "cruel trick".
Australian police say death threats have been made against the DJs from Sydney's 2Day FM radio station who made the call posing as Queen Elizabeth II and William's father Prince Charles.