Berlusconi has denied the allegation.
The witness, Gaspare Spatuzza, testified as a prosecution witness at the appeals trial of Sen. Marcello Dell'Utri, a close political associate of Berlusconi who was convicted in 2004 of ties with the Sicilian Mafia and sentenced to nine years in prison.
Berlusconi is not formally involved in the trial.
Spatuzza, who is serving a life sentence for several murders, told the court that in 1993 he was told by his boss, Giuseppe Graviano, that the mob had made a deal with Berlusconi that would provide unspecified "benefits" to the Mafia. The media mogul entered politics a few months later and won his first term as premier in 1994 elections.
Reports of Spatuzza's allegations have been swirling for days.
Berlusconi and Dell'Utri have both branded them ridiculous and denied any link to the Mafia.