The funnyman befriended the pop superstar after mimicking him for his cult TV sketch show, in which he portrayed a basketball-playing Prince who took the court in full stage outfit.
Ironically, the late singer was a huge basketball fan, who was considered a great player at high school.
Chappelle only agreed to hit the stage on Friday when his band told him Prince "would not condone" a cancellation.
The comedian opened his show by telling fans, "This is black 9/11. It's so much better that we grieve together," according to San Francisco media outlets.
In a statement to WCCO-TV, Chappelle paid tribute to his friend, adding: "His admirers are a community that spans the globe. His legacy is an immense offering of music, love and laughter.... Nothing of this world will begin to fill the void of his absence except his memory.
"So remember your loved ones often. Forget their faults and remember the best of what they made you feel."
Prince was such a fan of Dave's famous comedy sketch, he used a still photo of the comic dressed up as the 1999 singer presenting a platter of pancakes as the cover for his 2013 single Breakfast Can Wait.
Tributes continue to pour in for the late icon, who died at his home in Minnesota on Thursday (21Apr16) - Bruce Springsteen performed Purple Rain in his honour at a gig on Saturday night (23Apr16), Eric Clapton paid his respects on Facebook, and Elton John called Prince a "purple warrior" during his sold-out Caesars Palace show in Las Vegas on Saturday night.
Elton paused his Million Dollar Piano show to remember his encounters with Prince, before performing I Guess That's Why They Call It The Blues as images of the late singer were flashed on a big screen onstage.
And the weekend's (23Apr16) Saturday Night Live show was quickly rescheduled as a Prince tribute, with former SNL regular Jimmy Fallon introducing the programme by telling viewers, "Prince has been a special presence here... for the past four decades."
The late icon first appeared on SNL in 1981.
Clearly emotional, Fallon added, "Other people may have been on the show more times or performed more frequently, but there was always something different about a Prince performance: it was special, it was an event.
"Times have changed, styles have come and gone, but no matter what, Prince has never not been cool... he had his own colour... He owns purple... The guy was just amazing."
The tribute show featured classic Prince performances on Saturday Night Live and footage from a previously unseen set he played at the programme's 40th anniversary show after-party.
Lady Gaga also paid tribute to Prince with an emotional post on Instagram on Sunday (24Apr16), thanking him for "sharing your life with us". She added, "Giving up your anonymity because you felt compelled to share your gift. We learned so much. You just found God early, he needed you upstairs to innovate in heaven."
Gaga also tweeted a link to Prince’s Sign O’ the Times track, along with a note that read: "Gonna miss u man, thank u 4 all u gave to music."