"I am not guilty under any of the counts of the indictment," General Dragoljub Ojdanic said.
"I face this indictment with a clear conscience because I am blameless. I have nothing to hide, I have nothing to be ashamed of, I have nothing to fear."
Earlier prosecutors said in their opening statement that the Serb military campaign in Kosovo was "a widespread and systematic attack" on its civilian population and created an "atmosphere of terror".
They said Ojdanic and his co-accused including Serbian ex-president Milan Milutinovic formed a joint criminal enterprise with late Yugoslav president Slobodan Milosevic aimed at changing
the ethnic make-up of the predominantly Albanian province in favour of the Serbs.
Ojdanic and his co-accused have been charged with war crimes and crimes against humanity over the forced deportation of some 800,000 Kosovo Albanian civilians, the murder of hundreds of Kosovo Albanians, including women and children and sexual assaults by the Serb troops.
"There was no plan for the expulsion of Albanians nor was I involved in any situation where such a plan was discussed," Ojdanic said.
He stressed that after the presentation of his defence case the judges would "no doubt get a more faithful picture of what happened in the war itself causing them to drop the charges" against him.
The prosecution said that they were planning to call former NATO commander US General Wesley Clark and German General Klaus Naumann, head of NATO's military commission who also gave evidence in the Milosevic trial.
In June 1999 the Serb and Yugoslav troops withdrew from Kosovo following a three-month NATO bombing campaign against targets in Serbia and Kosovo.
Legally Kosovo remains a province of Serbia but is now run by the United Nations and NATO.
In February of this year UN-sponsored talks on Kosovo's future status began, but so far the negotiations have produced no concrete results.