Father Jim Martin, a Jesuit priest and member of the company, led a community prayer during the somber outdoor ceremony at the Labyrinth Theater Company, where Philip Seymour Hoffman formerly served as artistic director.
"We come together in a period of terrible mourning and incredible loss, and a period of overwhelming grief and sadness, but also to celebrate a remarkable life," he said.
"We will remember Phil in our own ways. We will remember how he touched our hearts."
Philip Seymour Hoffman was found in his Greenwich Village apartment on Sunday with a syringe in his arm and plastic bags containing a substance believed to be heroin. The exact cause of death is still unknown, pending further studies, according to a spokeswoman for New York City's Chief Medical Examiner.
Four people arrested in New York have been charged with drug offenses possibly connected to narcotics found at Philip Seymour Hoffman's home.
Philip Seymour Hoffman, 46, a best actor Oscar winner for his role in the 2005 biographical film "Capote," had been a member of the Labyrinth since 1995 and also served as its artistic director.
Friend and colleague Eric Bogosian praised Philip Seymour Hoffman for his courage and humility, as well as his prodigious output in theater and films over 20 years.
"I think it is important to note not only Phil's power as a great, great talent but as a person as well," he said.
New York theater actress Noelle McGrath described Philip Seymour Hoffman as one of the most phenomenal character actors ever.
"He was an old shoe of a guy who could just transform himself," she said.
Mimi O'Donnell, Philip Seymour Hoffman's long-time partner and the mother of his three children, is the artistic director of the Labyrinth Theater Company, one of the nation's leading ensemble theater groups.
A representative for Philip Seymour Hoffman said he will be buried in a private funeral service for family and friends in New York. A memorial is planned for later this month.
The Labyrinth, which was founded in 1992, also launched a donation campaign in Philip Seymour Hoffman's memory.
"Some of the brightest and most original new talents of the last 20 years found their own success because of Phil's steadfast effort and deep commitment to this non-profit theater," the campaign said on its website.
Broadway marquees were dimmed for a minute on Wednesday evening in Philip Seymour Hoffman's honor. In addition to his film roles, including best supporting Oscar nominations for "The Master" in 2013, "Doubt" in 2009 and "Charlie Wilson's War" in 2008, Philip Seymour Hoffman was known for his work in the theater.
He earned Tony award nominations for his role as Willy Loman in "Death of a Salesman" and for his parts in "Long Day's Journey Into Night" and "True West."
Philip Seymour Hoffman was also working on the final installment of the movie version of "The Hunger Games."