Abimbola Osundairo said Smollett asked him and his brother "to fake beat him up" and instructed them on how to carry out the January 2019 hoax.
Smollett planned a "dry run" and gave him a $US100 note to buy supplies for the staged attack, Osundairo said.
He said he and his brother agreed because Osundairo, who worked as a stand-in on TV show Empire, felt indebted to Smollett for help with his acting career.
Smollett, 39, is charged with six counts of felony disorderly conduct for making what prosecutors say was a false police report - one count for each time he gave a report, to three different officers.
Smollett's defence lawyer says he was a "real victim" and the brothers' accounts are unreliable.
Osundairo said that a few days before the attack, Smollett showed him some hate mail he said he received at the Empire studio.
Jurors viewed the note, which included a drawing of a person hanging by a noose, with a gun pointed at the stick figure and the letters MAGA, an apparent reference to then-president Donald Trump's slogan Make America Great Again.
He said Smollett sent him a text message a few days later asking to meet up "on the low", which he took to meet in private about something secret.
Osundairo said when they met, Smollett asked him "to beat him up" and asked if his brother could help.
"I was confused, I look puzzled," Osundairo said, and then "he explained he wanted me to fake beat him up".
Osundairo said that before the staged attack, Smollett drove the brothers to the spot where the attack would occur, and they decided the men should throw bleach on Smollett rather than the original plan to use petrol.
He also told that court that Smollett said a camera in the area would record the attack. "He wanted a camera to catch it," Osundairo said.
The trial continues.
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