Jesus Salas testified that it was early morning sometime in 2003 when he saw the three young visitors emerging from the wine cellar, which is under a game arcade on the ranch.
"When I saw the boys coming out of the arcade they weren't acting right and I approached them and asked if they were OK. And that's when I noticed the kids were drunk. They had been drinking. ... They weren't normal. Something was wrong with the kids," he said.
He said Jackson had been in the wine cellar with the boys.
Jackson, 46, is accused of molesting a 13-year-old boy at his Neverland estate in February or March 2003, giving him alcohol and conspiring to hold the boy's family captive to get them to make a video rebutting a damaging documentary.
Monday's testimony was part of evidence prosecutors hoped would show a pattern of improper sexual behavior by the singer.
"We're at a turning point in this trial," courtroom observer Jim Moret tells CBS News. "We're leaving the allegations about this one boy and about to bring in allegations of other boys."
Judge Rodney Melville ruled a week ago that the jury could hear allegations the pop star molested or had designs on five other boys, including actor Macaulay Culkin and two youngsters who reached multimillion-dollar settlements with the singer.
Salas also testified that on two occasions he was asked to serve Jackson wine in his bedroom, once when the accuser and two other boys were present.
Salas said that he brought four drinking glasses and a bottle of wine to the room. But he said the wine was not for the boys.
"Let me tell you something else," Salas said. "He ordered some sodas for them."
The prosecutor noted that when Salas testified before the grand jury he never mentioned sodas. Salas said he had just remembered it.
Salas said he could not remember whether children were present the other time he brought Jackson wine.
About 120 supporters gathered outside the courthouse Monday and held a candlelight vigil, wearing white to symbolize innocence and gold armbands similar to ones Jackson wears.
"Michael's in a fight for his life," said Vernay Lewis, a teaching assistant from Wilmington, Del. "We've got to be here."
Fans also unfurled flags from about 20 countries and raised them for passing motorists to symbolize support for Jackson from around the world. They also displayed a banner that showed Jackson with children of different nationalities against a backdrop of flags.