The singer, whose real name is Gaynor Hopkins, died in July at the age of 75.
The streets of the Mumbles, Swansea, where Tyler lived and was well-known among locals, were packed with people who knew and loved the singer on Saturday.
As the coffin, draped in the Welsh flag, made its way down Newton Road, the crowd burst into applause and song.
Among those waiting to pay their respects to Tyler was Carys Edwards, 18, who says the singer was "an inspiration to everybody".
"Her music touched a lot of people, especially me," she said.
"She was such an icon."
"Most importantly, she was a Swansea girl, and she didn't forget that," Ms Edwards's mother, Melanie Smith, 53, added.
Some fans had travelled from as far as Austria or Germany to watch the procession on Saturday.
Sarah Thomas, who lives in Swansea, described the singer as "a normal person who happened to be famous".
A celebration of Tyler's life, for family and friends, will take place at Swansea Minster church on Monday, before the singer makes a final journey through her hometown of Skewen.
Tyler's death came just months after she was treated in intensive care after being placed in an induced coma following an emergency intestinal surgery.
The singer achieved international fame in the 1980s with the release of Total Eclipse Of The Heart, which shot to the top of the charts in the UK and the US.
Faster Than The Speed Of Night, the album which featured the track, was also a chart-topping success and landed the singer her only UK number one album.
Recognisable for her husky voice, Tyler released many other hits, including Holding Out For A Hero, It's A Heartache and If You Were A Woman (And I Was A Man).
She represented the UK in the 2013 Eurovision Song Contest in Malmo, Sweden, with the song Believe In Me, finishing in 19th place.
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