In a strong, clear voice, the sniper suspect, dressed in a light gray shirt and tie, entered his plea in the slaying of Dean Harold Meyers, 53, killed by a single shot to the head at a gas station near Manassas on Oct. 9, 2002.
Muhammad, 42, could be sentenced to death if convicted.
Muhammad and Lee Boyd Malvo, 18, are charged with 13 shootings, 10 of them fatal, during a three-week period in October 2002 that spread terror across the Washington metropolitan area and had many people ducking for cover as they ran errands. Malvo goes on trial separately on Nov. 10.
Muhammad answered a series of questions from the judge and was then asked if he understood the charges. He remained silent for several seconds, until defense attorney Jonathan Shapiro whispered in his ear. Muhammad responded, "Yes, I understand what I am charged with."
Circuit Judge LeRoy F. Millette Jr. asked if Muhammad was ready for trial, to which he replied: "I'm prepared for it, yes."
The trial then opened with jury selection, which is expected to last several days.
Prospective jurors were brought to Circuit Courtroom Number Ten in groups of 40, reports CBS News Correspondent Barry Bagnato. Lawyers planned to question them, especially particularly about how they have been affected by all the publicity surrounding this sensational crime spree.
Millette excused 30 of 80 potential jurors, mostly because work or personal reasons prevented them from sitting through a trial expected to last six weeks. Two were excluded because they said pretrial publicity would make it impossible to for them to give an unbiased verdict.
The remaining prospective jurors will be questioned individually. A jury of 12 plus three alternates will be selected.
The judge sternly warned the prospective jurors to ignore pretrial publicity about the case.
"The only evidence you are to consider is evidence presented within the four walls of this courtroom. If you cannot make that commitment to this court, you should not sit on this jury," he said.
The trial was moved about 200 miles out of metropolitan Washington to this southeastern Virginia city after the defense argued that every northern Virginia resident could be considered a victim because the shootings made them afraid.
Muhammad faces two counts of capital murder. One charge is under an anti-terrorism law passed by the Legislature after the Sept. 11 attacks; it has never been used before. Prosecutors will have to show not only that Muhammad participated in a slaying, but that the intent was to influence the government or to intimidate the civilian population.
The other capital charge accuses Muhammad of multiple murders over three years. Prosecutors will have to prove Muhammad's involvement in the Meyers killing and at least one other fatal shooting.
Defense lawyers argue Muhammad can get the death penalty on this count only if he was the triggerman, while prosecutors say they need only prove Muhammad was the "instigator and moving spirit" of the murders.
"Muhammad's lawyers have a huge mountain to climb," said CBSNews.com Legal Analyst Andrew Cohen. Their client is immensely unpopular in Virginia and elsewhere; there appears to be decent evidence against him and it's hard to figure the defense is going to get much traction by arguing that Muhammad was influenced by Lee Malvo, the much younger of the two sniper suspects."
Malvo will be tried in neighboring Chesapeake in the slaying of an FBI analyst outside a store. His lawyers intend to pursue an insanity defense, saying Muhammad had so indoctrinated his young companion that Malvo could no longer tell right from wrong.