The pop star performed her take on "(You Make Me Feel Like) A Natural Woman," the 1967 song written by Carole King that became one of Franklin's signature hits.
Franklin died earlier this month at the age of 76 after a battle with pancreatic cancer.
Grande, who brought fianceé Pete Davidson to the event, was one of several performers.
Faith Hill performed gospel song, "'What a Friend we have in Jesus," earlier in the day.
Stevie Wonder, Fantasia Barrino-Taylor, and Chaka Khan are also set to perform.
Grande's rendition garnered plenty of reaction on social media and in the church.
Bishop Charles Ellis III joked that, because of his age and unfamiliarity with Grande as a performer, when he saw Grande's name on the program, "I thought that was something new at Taco Bell."
Grande laughed and embraced the pastor.
"Girl, let me give you all your respect."
Ellis then asked the audience to give Grande another round of applause, as well as an ovation.
"Thank you. We love you Aretha," Grande said.