Brown is the most prominent figure to give evidence before the five-person panel since his predecessor Tony Blair made a highly publicised appearance in January.
But unlike Blair, Brown was a far less vocal advocate of the war.
The prime minister, who is expected to call a general election in the coming weeks, has been accused of failing to provide enough funding for military chiefs or equipping troops properly.
"Gordon Brown was the paymaster for this most unpopular of wars and was the second most powerful man in the government," John Rees, co-founder of the Stop The War Coalition, said as Brown arrived at the hearing.
In his testimony to the inquiry in January, Geoff Hoon, the defence minister at the time of the war, said his ministry had lacked funds for years before invasion.
Friday's inquiry, chaired by former civil servant John Chilcot, questioned Brown on how the fighting in Iraq had been funded.
Alan Fisher, Al Jazeera's correspondent in London, said that Brown was "bullish" in his defence of his actions over the issue.
Fisher said: "The reason he is being so bullish is that he has one eye on the UK general election which will come in the next few weeks.
"And he doesn't want to be painted as the man who didn't provide the money for the forces to do what they needed to do, who put British soldiers at risk because he was being mean with the pennies.
"He [Brown] said at all points that he made it absolutely clear that the ministry of defence should do what they felt was necessary.
"And somehow the finance ministry, which he was in charge of, would find the cash.
"Now that goes against what we've heard from senior civil servants, and also from the man who was the defence minister at the time.
"It's now for the inquiry to try and reconcile these statements and find out who was telling the truth."
Earlier on Friday, the British newspaper The Times published comments from General Charles Ronald Llewelyn Guthrie, who led the armed forces from 1997 to 2001.
He said: "Not fully funding the army in the way they had asked ... undoubtedly cost the lives of soldiers.
"He [Brown] should be asked why he was so unsympathetic towards defence and so sympathetic to other departments."
Jocelyn Cockburn, a lawyer for relatives of soldiers killed in lightly armoured Snatch Land Rovers in Iraq, said that she was urging Chilcot to challenge Brown over funding concerns.
"Specifically, was he aware of concerns around the lack of armoured vehicles and did he receive any requests for funding [particularly in the period 1997-2006] to purchase armoured vehicles?" she wrote in a letter to Chilcot.
The use of the Snatch trucks has been the focus of growing anger here after a number of soldiers were killed by roadside blasts in the vehicles in both Iraq and Afghanistan.
Chilcot said he would not call Brown and other serving ministers until after the election to avoid the hearing "being used as a platform for political advantage".
However, following pressure from political rivals, Brown offered to appear beforehand.
After two years trailing far behind the opposition Conservatives in opinion polls, Brown's governing Labour Party has experienced a recent boost in support.
Any fresh revelations linking him to the still-divisive Iraq conflict, seen by many as a black mark on Labour's 13 years in power, could be highly damaging.
Brown was finance minister from 1997 until 2007, when he took over from Blair as prime minister.