Lula, 71, was being grilled by Judge Sergio Moro on charges that he received a bribe in the form of a seaside apartment near Sao Paulo.
He arrived at the courthouse in the southern city of Curitiba at 2:00 pm (1700 GMT) for the hearing, which was barred to the public and media.
Security was exceptionally tight by Brazilian standards.
Several hundred riot police, watched by an officer on a rooftop, stood guard, keeping thousands of Lula supporters and even local residents away from the area.
A verdict is not expected for weeks, but if Lula is found guilty, and then loses an appeal, he would be barred from seeking office, likely including running for re-election in 2018. He could even face prison time.
A fiery orator who rose from shoeshine boy to union leader and founder of the Workers' Party before leading Brazil from 2003-2010, Lula is a polarizing figure in Latin America's biggest country.
He leads opinion polls ahead of next year's election, but inspires hatred among opponents fed up with corruption revelations and a devastating recession that began under Lula's handpicked successor Dilma Rousseff.
"I think he is innocent. If they had something concrete against him, there's no doubt he'd have been arrested," said Gerson Castellano, 50, who joined Workers' Party supporters who bussed in to Curitiba.
"It's a class struggle that's going on."
The "Car Wash" probe revealed that top politicians from both the left and right sold access to juicy contracts at state oil company Petrobras throughout most of Lula's presidency.
Scores of senators and other powerful figures have been convicted or are under investigation.
Prosecutors say they suspect he not only took bribes and sold influence, but amounted to a kingpin over the wider scheme.
Lula, who also faces four other corruption court cases, vigorously denies the charges, describing the onslaught as an attempt to destroy him and his leftist movement.
Against that backdrop, Wednesday's court hearing was seen as a political high noon between the veteran politician and the implacable, increasingly popular 44-year-old Moro.
Raising pressure on Lula, a judge in Brasilia on Tuesday ordered the suspension of activities by the Lula Institute, a social research body set up by the ex-president, over suspicions it was linked to criminal activity in a separate corruption case.
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