The 400 guests - including fellow Irish boy band Westlife, Boyzone's manager Louis Walsh, Jason Donovan and Sir Elton John's partner David Furnish - raised tearful toasts to Stephen as they watched videos of his life.
A friend revealed: "The Boyzone guys joined in the toasting and all his close friends and family held up a glass or two to Stephen.
"It got even more emotional when videos and songs of Stephen's career were played to guests - especially when 'No Matter What' was played.
"The guys from Westlife looked visibly upset. It was a great celebration of his life and his family were delighted. There were stories told late into the night, reminiscing about Stephen."
The wake ended at 3am, when the last mourners stumbled out of the hotel.
As he was escorted to his black car, Boyzone singer Shane said: "We gave Stephen the farewell he deserved. We all deal with grief in our own way, and this was our way.
"It was a brilliant night, fitting for a brilliant person. We will never forget him."
Stephen died of acute pulmonary oedema - a rapid build-up of fluid in the lungs - on October 10 at his home on the Spanish holiday island of Majorca.
His funeral was held at Dublin's St Laurence O'Toole's Church.
Meanwhile, Stephen's family has reportedly decided not to contest his will, which will see £10 million left to his grieving civil partner Andrew Cowles.