Imam Samudra, 32, is accused of planning and carrying out the Oct. 12 attacks, that killed 202 people, mostly foreign tourists. He is suspected of being a key figure in the al Qaeda-linked terror group Jemaah Islamiyah, which has been blamed for the bombings.
If found guilty, Samudra could be sentenced to death under anti-terror laws passed in the weeks after the bombings.
As Samudra sat down to hear the indictment, he looked over to his nine lawyers and shouted "Takbir!" or "Proclaim!" — a religious rallying cry. They responded with calls of "God is Great!" and cheers.
After the outburst, Samudra, who was dressed in a white loose fitting shirt and wearing an Islamic prayer cap, sat impassively — occasionally stroking his goatee.
Samudra's defense team demanded judges throw out the case, arguing that their client should not be tried under laws put in place after the crime.
Several relatives of Australian victims of the attack sat in the front row of the court to witness the proceedings, but few Balinese attended the trial.
"He is the one we really wanted them to catch," said Randall Lee, who lost his two brothers and a pregnant sister-in-law in the attack. "He should be taken away, shot in the back of the head and buried in a ditch."
Samudra's lawyers and police say he confessed to playing a role the attacks, like many of the other 33 suspects arrested over the bombings.
"The defendant said there would be a big project to declare war on the United States and in that meeting several targets in Bali were discussed (and) the defendant said he would choose the best ones," said prosecutor Nyoman Dili.
Samudra has told reporters he targeted the nightclubs in Bali because he was aiming to kill as many Americans as possible. Almost half the victims of the blast were Australian tourists, while seven were from the United States.
Samudra is the second suspect to go on trial.
The trial of Amrozi bin Nurhasyim, accused of buying explosives and bomb-making material used in the attack, began May 12 and continued Monday with several prosecutions witnesses taking the stand.
One witness, Azwar Anas, told the court that he sold Amrozi the Mitsubishi minivan that exploded outside Bali's Sari Club.
Security was tight at the government building used to host Samudra's trial on Bali island. About 50 armed officers patrolled the building and hundreds more manned roadblocks set up nearby.
Dili accused Samudra of attending key planning meetings before the attacks, recruiting fellow bombers and arranging the financing of the bombings.
"The accused came up with the idea of the bombings, and arranged the strategy according to Islamic law," the prosecutor told the court.
Dili alleged the bombers were avenging the deaths of Muslims by the United States in Afghanistan, Iraq and elsewhere in the world.
The indictment also accused Samudra of involvement in the bombings of four churches on Batam island, Riau province, in 2000 that wounded three people.
Attorney Qadar Faisal asked the court to dismiss the charges — an outcome considered unlikely given international pressure to secure a conviction and what prosecutors say is solid evidence.
"The charges from the prosecutors cannot stand up in court," he said. "We hope the court will consider our objections."
The trial was adjourned until Wednesday, when the prosecutors will respond to the defense arguments.
The proceedings are expected to shed light on the inner workings of Jemaah Islamiyah and its ties to militants in the world's most populous Muslim nation.
The trial also may show how an aspiring computer whiz became a supporter of Osama bin Laden and a willing foot soldier in his war against the West.
Samudra, who has at least five aliases, spent time in Afghanistan in the 1990s, where he learned bomb-making skills, police and lawyers say.