Erol Olcak and his 16-year-old son were shot dead on the Bosphorous bridge in the city during Friday's attempted coup.
They had been on the bridge to protest against the putsch launched by a group within the military, according to local media.
Erdogan told the crowd of hundreds chanting Allahu akbar, "God is greatest": "Erol was an old friend of mine."
Unable to control his tears, Erdogan then said: "I cannot speak any further. Condolences to our nation."
Olcak had worked with Erdogan and the ruling Justice and Development Party (AKP) and had been described as "masterminding" Erdogan's presidential campaign in 2014 by Turkish media.
The ceremony on the Asian side of the city was also attended by Ahmet Davutoglu, the former prime minister.
Earlier in the day, Erdogan attended the funerals of other victims in Fatih mosque.
In total, 161 civilians and regular troops were killed, according to government figures.
The military said another 104 coup plotters were also killed.
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