Karima El-Mahroug described "sensual" soirees in a discotheque at Berlusconi's villa that invitees called the "bunga bunga", saying she was paid 2,000 or 3,000 euros (USD 2,600 or USD 3,900) a night.
The woman, better known by her nickname Ruby the Heart Stealer, said she saw up to 20 girls stripping for the prime minister but had never seen physical "contact" between the host and the young women.
The trial at which El-Mahroug was testifying is of Lele Mora, a former showbusiness agent, Emilio Fede, a network anchor for Berlusconi's television empire, and Nicole Minetti, a showgirl and politician.
The three are accused of supplying girls for the allegedly raunchy "bunga bunga" parties in 2010 but Berlusconi says they were "normal dinner parties" followed by "burlesque contests".
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El-Mahroug said she first met Fede at a beauty contest in Sicily when she was 16 and he had asked her for her phone number. She said she had also worked for Mora as an "image girl" at parties.
Berlusconi's separate trial for allegedly having sex with an underage 17-year-old prostitute, El-Mahroug, and for abuse of office is due to conclude next month after more than two years.
El-Mahroug had been due to testify at that trial but initially said she could not attend as she was in Mexico and was subsequently struck off the witness list by both the prosecution and defence.
Berlusconi is accused of pressuring police to have El-Mahroug released from custody when she was arrested for petty theft so she would not reveal their liaison. His defence says he thought she was the niece of then Egyptian president Hosni Mubarak and only wanted to avoid a diplomatic incident.
Prosecutors have requested that Berlusconi serve six years in prison and be banned from holding any public office for life in that trial, also in Milan, in which the verdict is expected on June 24.