Yemeni protestors chanting "death to America" and "death to Israel" made their way to the burial site, where Shiite Muslim were deployed in large numbers.
The Yemeni government turned over the remains of Hussein al-Houthi to his family earlier this year.
The previous government of veteran leader Ali Abdullah Saleh, who stepped down last year after a popular uprising, originally buried Houthi at the central prison in Sanaa to prevent his grave becoming a shrine for the Zaidi sect from which he came.
The Houthis are an important tribe belonging to the Shi'ite Zaidi sect which accounts for about 25 percent of Yemen's population of 25 million.
It controls the northern province of Saada and parts of the neighboring provinces of Omran, al-Jouf and Hajja bordering top oil exporter Saudi Arabia.
A spokesman for the Houthis accused the government of refusing to give visas to several dignitaries who wanted to travel to Yemen to attend the ceremony, and of tearing down pictures of Houthi put up in the capital Sanaa.
"This shows the authorities have not moved far from the position of the previous regime," Mohammed Abdel-Salam said.
Complaining of social, religious and economic discrimination in Yemen, the Houthis fought several battles with government forces between 2004 and 2010, when a truce was announced.