Anwar, a former deputy premier who was sacked and jailed on corruption and sodomy charges a decade ago, dismissed the allegations as a "malicious" plot to neutralise an opposition that made huge strides in 2008 elections.
"It is trumped up by political masters using the prosecution for that purpose," he told the High Court as the case began after months of delays.
Prosecutors said they had DNA samples and other evidence to prove that Anwar, 62, had sexual relations with Mohamad Saiful Bukhari Azlan, a former aide, at an upmarket Kuala Lumpur condominium.
Saiful, 24, testified that Anwar, using vulgar language, asked him to have sex with him shortly after he came to the apartment on June 26, 2008 to deliver a document.
"I told him I was not willing to do it. Anwar was angry and ordered me to the main bedroom," he told the court.
"After that he asked me to rinse myself. I went to the toilet to rinse myself. I came out and hung my clothes on a hanger and I was only wearing a towel around myself."
Saiful said that Anwar, also wearing just a towel, then embraced him. His testimony was cut short as the judge agreed to a defence application to hear the rest of the account in a closed hearing on Thursday.
During the testimony one of Anwar's daughters yelled out "liar" and as Saiful left the court Anwar turned to him and said: "Very good, very good, well rehearsed."
Prosecutors said that two days after the alleged incident Saiful underwent a medical examination at a hospital.
"The prosecution will also bring specimens of semen from Mohamad Saiful Bukhari Azlan's anus which is verified by the chemistry department as belonging to the accused," deputy public prosecutor Mohamed Yusof Zainal Abiden said.
He said that Anwar's guilt would be proven through Saiful's testimony, as well as "forensic evidence from doctors and chemists alongside circumstantial evidence and documentary evidence".
Saiful was the first witness called in the trial, which is taking place after months of delays caused by defence applications to strike down the case and obtain access to evidence including medical reports and closed-circuit television footage.
Sodomy, even among consenting adults, carries a penalty of up to 20 years in Malaysia, a conservative and Muslim-majority country.
Anwar has accused Prime Minister Najib Razak and his wife of helping concoct the charges, and said he would call them as witnesses as he fights a charge that could redraw Malaysia's political landscape.
The Barisan Nasional coalition government suffered its worst ever results in the 2008 polls, when Anwar rallied the opposition to seize a third of parliamentary seats.
The trial, which defence lawyers say could drag on for eight months, presents a major challenge for both sides of the political divide, and will be a high-profile test of Malaysia's justice system.
It comes as the opposition is increasingly beset by infighting, while the government is struggling to defend Malaysia's image as a moderate and stable Muslim-majority nation.
Anwar, a married father-of-six, was a celebrated finance minister before being sacked in 1998 in a policy row with then-premier Mahathir Mohamad during the Asian economic crisis.
He was convicted of sodomy and corruption but, after six years behind bars, his sexual misconduct charge was overturned and he was freed in 2004.