Caceres, 45, was killed Thursday by four gunshots inside her home in La Esperanza, about 180 kilometers (110 miles) west of Tegucigalpa, the Honduran capital.
Mourners filled the streets as her white coffin was carried through the streets of La Esperanza, with many carrying posters bearing her image.
A member of the Lenca indigenous group, Caceres was one of her country's best-known activists, campaigning for indigenous and environmental causes. Last year she was awarded the prestigious Goldman Environmental Prize
for her work in leading a successful campaign against one of Central America's biggest hydropower projects, the Agua Zarca Dam on the Gualcarque River.
Caceres had long been subject to repeated threats and harassment over her work. She was under guard at the time of the killing, Honduran authorities said.
Daughters: Caceres killed for her activism
Laura Caceres, one of her four daughters, said the family called for international human rights organizations to intervene to ensure Caceres' death was properly investigated and her killers brought to justice.
"We know as a fact that the motives of this vile murder were her resistance and fight against the exploitation of nature and people defending common goods," said Olivia Caceres, another of her daughters.
Honduran human rights organizations echoed the family's call, expressing doubts that Honduran authorities would adequately investigate the killing.
"There is very strong concern here," said Wilfredo Mendez, director of the Center for Research and Promotion of Human Rights
"We think there should be a specialized independent investigation commission to know the true causes and motives for the assassination."
Rigoberto Ulloa, director of the Ecumenical Observatory of Human Rights
, supported the call, saying the need for such an investigation was "urgent."
Eyewitness under protection
But Honduran authorities rebuffed the notion, saying an independent inquiry was not necessary. National Police spokesman Hector Ivan Mejia said five police teams were investigating the case, and results were expected soon.
"The only thing I can tell you objectively is the intention of the Honduran government to clarify this case," he said.
Earlier, Honduran Security Minister Julian Pacheco said police had made at least one arrest in the case and had an eyewitness to the shooting under witness protection.
Honduras was the most deadly country for environmental activists last year, according to watchdog Global Witness
. The country also has one of the world's highest homicide rates
Tomas Garcia -- who, like Caceres, was a co-founder of the Council of Indigenous Peoples of Honduras
-- was shot and killed during a peaceful protest against a dam in 2013.