"She said in the night she had been awakened by men knocking at her door that said they had been sent to her by Charles Taylor, and they had given her a very huge diamond," Farrow told the court.
Farrow said Campbell had then said she intended to give the diamond to the Nelson Mandela Children's Fund.
Campbell testified last week that she had received "dirty-looking stones" at the 1997 dinner. But she told the court that said she did not know who the gift was from.
Prosecutors had called the model to testify in the hope that she could provide evidence that Taylor had handled diamonds allegedly used to purchase weapons during the 1991-2001 Sierra Leone civil war.
Taylor is on trial on charges of murder, rape, mutilation, sexual slavery and conscription of child soldiers during wars in Liberia and Sierra Leone, in which more than 250,000 people were killed.
The court is also to hear testimony from Carole White, Campbell's former modelling agent, who is expected to challenge Campbell's version of events as well.
White told prosecutors in May that Taylor and Campbell were "mildly flirtatious" throughout the dinner, and that she heard him promise the model a gift of diamonds.
Campbell later seemed disappointed with the "pebbles" she had received, White said in a statement.
Campbell said last week that she told White and Farrow about the gift, both of whom assumed the stones were diamonds.
"One of the two said 'that is obviously Charles Taylor' and I said 'yes I guess it was'," she told the court, adding that she later gave the stones to Jeremy Ratcliffe, a representative of a Mandela charity.
Ratcliffe, the trustee of Nelson Mandela's charity in South Africa, testified before the court on Friday, saying he handed over to authorities three alleged "blood diamonds" given to him by Campbell.
Musa Zondi, a the spokesman for the special investigations unit of the South African police, confirmed the authenticity of the diamonds.
"They are real diamonds, handed back to us now, and the investigation begins."