The testimony came on the first day of the misdemeanor assault trial of Brown's bodyguard, Christopher Hollosy.
Parker Adams, 20, says he suffered a broken nose and other injuries to his face after he was struck with back-to-back punches by Brown and Hollosy outside the W Hotel in Washington, D.C., in October.
Adams told a District of Columbia Superior Court on Thursday that he and two female friends had approached Brown, who agreed to have his photo taken with the two young women.
When Adams tried to get in the photo, he testified that Brown made a homophobic remark, allegedly telling him "I'm not into that gay shit."
The verbal confrontation escalated and Adams testified he was punched below the nose by Brown.
"As I put my dukes up, that's when the bodyguard stepped in between us and he slugged me in the face," Adams said.
Both Brown and Hollosy have pleaded not guilty.
Brown, 24, was on probation when he was arrested. He rejected a plea agreement and will face trial for misdemeanor assault once Hollosy's trial wraps up, likely as soon as Friday.
If convicted, Brown could face jail time because the assault would violate his parole.
Defense attorney Bernie Grimm told the court that Adams was seeking to make money off the incident and had filed a $3 million lawsuit against Brown and his bodyguard.
"No matter where you come from, that's a lot of money," Grimm said.
Hollosy told police after the incident it was him, and not Brown, who had punched Adams.
Grimm requested that the confession be suppressed as evidence at trial because his client had not been read his Miranda rights.
Brown was jailed last month after violating his probation when he was dismissed from a facility where he was receiving court-ordered treatment related to his 2009 assault of his then-girlfriend, singer Rihanna.
Since the 2009 sentence, Brown has been involved in altercations with rapper Drake and his entourage in a New York nightclub and R&B singer Frank Ocean in a Los Angeles parking lot.