In the absence of a body, the crowd gathered in front of an empty place traditionally reserved for the coffin at Fatih mosque, AFP journalists reported.
Supporters from the newly-formed Jamal Khashoggi Friends Association also attended.
Khashoggi, a critic of the Saudi leadership, was last seen entering the kingdom's Istanbul consulate on October 2. Turkish officials say he was strangled and his body dismembered.
"We decided to hold the prayers as we are convinced that his body will never be found," Fatih Oke, executive director of the Turkish-Arab Media Association (TAM) of which Khashoggi was a member, told AFP.
The ceremony which took place under rain, "is a message delivered to the world to say that the murder will not go unpunished and that justice will be served," said Ibrahim Pekdemir, an Istanbul resident who attended.
Saudi prosecutors on Thursday announced indictments against 11 people and said a total of 21 individuals were in custody in connection with the killing.
But they exonerated the kingdom's powerful Crown Prince Mohammed bin Salman of involvement in the murder.
Yasin Aktay, a close friend of Khashoggi and advisor to Turkish President Recep Tayyip Erdogan, strongly criticised the Saudi version of events.
"They want us to believe that the killers themselves made the decision to assassinate Jamal Khashoggi, we do not believe in this story," he said after the prayer.
"We will continue to ask who are the true contractors" of the murder.
Turkey has insisted it was a premeditated killing.
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