Former station chief Giliam van Rensburg, who retired from the police last year, testified that an officer stole a watch worth as much as USD 10,000, in a damning indictment of his ex-colleagues.
The watch went missing while forensic experts were examining a blood-splattered box containing seven other timepieces and occurred even after Van Rensburg warned his staff against theft.
"I saw those watches and I said this is tempting for any person because this is expensive watches," he told the court.
"I said, 'I can not believe it. We were just there. How can this watch be gone?'"
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Body and vehicle searches failed to turn up the missing watch and a theft docket was opened, he said, adding: "I was furious."
The admission calls into question the police's overall handling of the crime scene, in a case that is likely to hinge on sensitive forensic evidence.
Van Rensburg said Pistorius's sister Aimee removed another watch in the presence of police while she fetched clothes for her brother.
"At that particular moment the ballistics expert was handling the firearm without gloves," Van Rensburg told the court today, adding that the policeman had already removed the magazine.
Pistorius defence lawyer Barry Roux already blasted police misconduct during the athlete's bail hearing last year, and it is expected to be a key line of the defence as the trial continues.
During the bail hearing, lead investigator Hilton Botha admitted that he had walked through the scene without protective footwear and missed a bullet that had lodged in the toilet bowl.