Three former ministers and two officials have been charged with corruption in connection with a $214m contract to produce identity cards.
Identity cards were finally introduced earlier this year
The BBC's Mannir Dan-Ali in the capital, Abuja, says this case is being seen as a test of the government's pledge to stamp out corruption.
Nigeria is regularly named as one of the world most corrupt countries.
In a packed courtroom, the men pleaded not guilty to charges that they sought bribes from the French firm, Sagem.
Former Internal Affairs Ministers Sunday Afolabi and Mahammed Shatta and former Labour Minister Hussain Akwanga denied 16 charges that they had sought bribes worth some $2m, along with two senior officials.
Mr Akwanga was sacked earlier this month.
Reuters news agency reports that the local representative of Sagem failed to appear in court.
The Sagem charges are the highest-profile case yet brought by the Independent Corrupt Practices Commission (ICPC), set up by President Olusegun Obasanjo three years ago.
It has yet to secure the conviction of a senior official.