Former prime minister is accused of telling his troops to rape and murder civilians.
The three men face a total of 37 counts of war crimes and crimes against humanity.
Carla del Ponte, the chief prosecutor, told the court in her opening statement: “These three men come before you accused of crimes – ugly, cruel and violent crimes.
“Be in no doubt that this warlord, his lieutenant and his jailer have blood on their hands.”
According to the prosecution the men formed a joint criminal enterprise aimed at driving out Serb civilians and others perceived to be collaborating with the Serbs or not supporting the KLA from the region under their control.
Haradinaj, 38, was indicted in 2005 while serving as the prime minister of the Albanian-dominated Serbian province.
After resigning, he surrendered to the ICTY, but was allowed to return to Kosovo and retake leadership of his party, which is now a member of the ruling coalition in the UN-administered province.
The indictment charges him with allowing KLA troops under his command to target Serb and other civilians that were seen as collaborators for kidnapping, murder, detention and other mistreatment.
He is also charged with overseeing the setting up of detention centres were civilians were unlawfully held, abused and tortured by troops under his command.
A number of prisoners died as a result of the beatings while others were executed on the orders of the accused, the prosecution says.
All the defendants have insisted on their innocence.
In November 2005 the court sentenced former KLA member Haradin Bala to 13-years in prison for torture and murders committed at a KLA-run prison camp; two of his co-accused were acquitted.
Though still a Serbian province, Kosovo has been run by the UN since 1999, after a Nato bombing campaign helped end a crackdown by Belgrade-controlled forces against the KLA and its supporters.