The court heard how horror films had fuelled Armin Meiwes' childhood fantasies of eating school friends.
The 41-year-old computer technician is charged with murder, even though the victim allegedly volunteered for his fate by replying to an internet advert.
The gruesome incident was all captured on camcorder and the footage is expected to form part of the evidence.
"I had the fantasy, and in the end I fulfilled it," he said. The fantasy first developed between the ages of eight and 12, he added.
Mr Meiwes spoke of how he felt ignored by his father, and longed for a good-looking younger brother - whom he would bind to himself forever by consuming.
It is Germany's first cannibalism case, and the world's media have gathered in Kassel to watch the proceedings.
Television images showed Mr Meiwes - wearing a jacket and a tie - smiling and talking light-heartedly to his lawyer moments before the trial began.
It was the first time that the self-confessed cannibal had been seen in public since his arrest.
The grisly details of the case caused a sensation in the German media when Mr Meiwes was arrested in December, 2002.
In a recent newspaper interview he admitted that he had killed and then partly eaten his victim.
Mr Meiwes advertised on the internet for a well-built male prepared to be slaughtered and then consumed.
"Slim and blond, that would have been the type", he told the court.
The victim, 43-year-old Bernd-Jurgen Brandes, answered the advert in March 2001.
Mr Meiwes told investigators he took Mr Brandes back to his home in Rotenburg, where Mr Brandes agreed to have his penis cut off, which Mr Meiwes then flambéed and served up to eat together.
Prosecutors say Mr Meiwes then stabbed the victim repeatedly in the neck and dissected the corpse.
Legally it is a tricky case, says the BBC's correspondent in Berlin, Ray Furlong.
Cannibalism is not a recognised offence under German law and the defence will argue that, since the victim volunteered, this was no murder.
If the court accepts the defence argument, Mr Meiwes can expect a jail term of up to five years.
But the prosecution will push for a life sentence on the basis that Mr Meiwes is simply too dangerous ever to be released.
Meanwhile, Germans will continue to be treated to a media frenzy that plays on the story's unrivalled shock value.
And among the "highlights" will be the two-hour video that Mr Meiwes took of the whole incident on his camcorder, our correspondent says.
"The public probably won't be excluded from this part of proceedings; we have a tradition of open trials," says legal expert Felix Hardenberg.
"But the panel of judges will show only the relevant parts: what the victim is saying and doing before and during the killing."
Mr Meiwes has said that after his trial he intends to pass the time in jail - if convicted - by writing his memoirs.
The court will hear 38 witnesses and 14 sessions are scheduled in the trial, which is scheduled to end in late January.
The case only came to light when an Austrian student spotted another advertisement placed by Mr Meiwes on the internet and alerted police.