Following the emotional testimony, defendant Detlef S. talked with his attorney, Thomas Dueber, who then told the court the 48-year-old acknowledged what his daughter said was true.
The scene took place behind closed doors to protect the witness' privacy, but was recounted to the wider court by Presiding Judge Winfried Hetger after the public was allowed back inside, the news agency DAPD reported.
Detlef S., whose last name has not been given due to German privacy concerns, is accused of assaulting his daughter as well as his twin stepdaughter and stepson, who are now 28, between 1987 and 2010.
He admitted Tuesday at the start of the trial to fathering eight children with his stepdaughter - one of whom died in infancy - but denied the 350 counts of sexual abuse against him and 35 other counts for allegedly forcing the two girls to have sex with other men for money.
No plea has been entered, as per usual in a German court.
His stepson Bjoern B. also took the stand behind closed doors Wednesday, telling the court that he was sexually abused by his stepfather starting in 1987, and that Detlef S. threatened to beat him if he told anyone, Hetger said.
Detlef S., an unemployed truck driver, once beat his wife senseless, and also punched other family members and sometimes struck them with a homemade whip, the stepson told the court, according to the judge.
If convicted, Detlef S. faces a possible 15 years in prison. Attorneys for the victims, however, say they will push to have him declared a danger to society so that he can be held indefinitely.
"If he were to get out of prison, I'd run away," his daughter said in an interview published Wednesday in Germany's Bunte magazine.
A verdict is expected by the end of February.