The former governor of Nigeria's oil-rich Delta State has pleaded not guilty to 103 counts of corruption, money-laundering and abuse of office.
Mr Ibori's $35m assets included several properties in London
James Ibori is a wealthy and powerful politician and a close associate of Nigeria's President Umaru Yar'Adua.
A BBC correspondent says this is one of the most significant prosecutions since the establishment of the anti-corruption agency four years ago.
Mr Ibori is also under investigation by the Metropolitan police in the UK.
As governor he earned less than 25,000 a year, but somehow amassed more than $35 million in assets which he transferred abroad.
A UK court froze those assets on suspicion that they are the proceeds of crime and provided the Nigerian government can prove rightful ownership, they will be duly repatriated.
Cat and mouse
Mr Ibori lost his immunity from prosecution after stepping down as governor in May but had managed to stay one step ahead of investigators until his arrest.
The BBC's Alex Last in Lagos says although other former governors have been on trial no politician this well connected has been prosecuted before.
His trial is being held in Kaduna, a city north of the capital, as anti-corruption officials say Abuja's courts are already too congested with cases.
Our correspondent says it is not clear whether the Nigerian government was informed of Mr Ibori's arrest in advance as the president was on his way out of the country when the arrest was made.
Earlier, law enforcement agents in both the UK and Nigeria had complained that the Nigerian attorney general was deliberately trying to stall their investigations, allegations he denies.
Officially the slogan of Nigeria's new presidency has been upholding the rule of law, so with the arrival of Mr Ibori's case in court, any interference now would be politically embarrassing, our reporter says.