The government of the city of Shenyang in northeastern China, where Mr Liu had been treated for advanced liver cancer, said in a briefing that the cremation took place on Saturday morning in a ceremony attended by family and friends.
The wife and other family members of China's best-known political prisoner have been closely guarded by Chinese authorities and largely out of contact with the outside world.
Mr Liu, 61, died on Thursday from multiple organ failure that followed a battle with liver cancer while serving an 11-year sentence for incitement to subvert state power.
Foreign governments and Mr Liu's supporters had urged China to release Mr Liu and his wife to allow them to seek treatment abroad but Beijing dismissed those requests.
Tributes have rolled in from around the world to mourn Mr Liu, but there is little mention of him in China's heavily-censored state media and social networking platforms. One notable exception was a report by a newspaper published by the ruling Communist Party, which on Friday dismissed Mr Liu as a pawn of the West whose legacy will soon fade.
Mr Liu lived a "tragic life" because he sought to confront Chinese mainstream society with outside support, The Global Times said in its editorial headlined " Liu Xiaobo a victim led astray by West."
"Liu's last days were politicised by the forces overseas. They used Liu's illness as a tool to boost their image and demonise China," the paper said.
"The West has bestowed upon Liu a halo, which will not linger," it said. "By granting him the Nobel Prize, the West has 'kidnapped' Liu. However, the West only puts a halo on those useful to them."
While Mr Liu did have considerable renown abroad - official censorship made him virtually a non-person at home.
US president Donald Trump, German chancellor Angela Merkel and French president Emmanuel Macron were among Western leaders offering praise for Mr Liu .