Blah said he was among about 180 fighters recruited by Taylor and flown to Libya in the late 1980s to undergo months of military training.
The fighters learned to use AK-47 assault rifles and surface-to-air missiles at a military camp near Tripoli, he said.
Blah said men from countries including Gambia, the Philippines and Sierra Leone were also trained at the camp.
Among them was Sam Bockarie, one of the Sierra Leone rebels Taylor is accused of supporting.
Blah said Bockarie and the other fighters would call Taylor "chief".
Taylor denies the charges, but the prosecution says he armed the fighters in return for diamonds.
Taylor's forces entered Liberia late in 1989, triggering a civil war that lasted several years and left thousands dead.
|Taylor appears at the International |
Criminal Court in The Hague [File: EPA]
After Taylor took power in Liberia, Muammar Gaddafi, Libya's leader, continued to support him, Blah said.
He said Gaddafi sent Taylor's regime a shipment of crude oil to sell so the proceeds could be used to buy "military hardware".
Blah was subpoenaed to testify and had originally been due to give evidence anonymously.
However, he later decided to speak in open court despite a death threat emailed to his family.
In an example of the brutality of the conflict in Liberia, and foreshadowing later atrocities in Sierra Leone, Blah said one rebel commander "had a habit of eating fellow human beings" and that fighters joined his unit only if they were prepared to take part in cannibalism.
Blah said he once visited the commander, Nelxon Gaye, at a camp in a rubber plantation and found him roasting human hands.
"He did it over a fire and he ate it with boiled cassava," Blah said.
Blah said children were often forced to fight and that he had encountered some aged 13 and younger.
He said they dragged their weapons behind them, were very aggressive, unreasonable and had no sense of direction.
Blah, 61, briefly served as Liberian president in 2003, assuming power after Taylor was forced into exile.
Neither man looked at the other as Blah, walking with the help of a cane, entered the special court for Sierra Leone trial chamber.
His testimony, which will continue on Thursday, is expected to detail how Taylor allegedly controlled the rebels in neighbouring Sierra Leone from Liberia.
Such evidence is critical to prosecutors seeking to link Taylor to a conflict in another country.
Taylor's trial is being held in a courtroom rented from the International Criminal Court in The Hague because of fears prosecuting him in Sierra Leone could spark new violence.
With more than 40 witnesses still to appear the case is expected to continue for some months.