She added it was her and Kelly in a videotape that was at the heart of his 2008 child pornography trial, at which he was acquitted.
Jane - the pseudonym for the now 37-year-old woman - said publicly for the first time that the girl in the video was her and that the man was Kelly.
When the prosecutor asked how old she was at the time, she said quietly: "14".
Kelly, 55, would have been around 30 years old at the time.
In addition to charges of child pornography and enticement of minors, Kelly faces charges of conspiring to rig that 2008 trial by intimidating and paying off the girl to ensure she did not testify.
Some jurors who presided over that 2008 trial, which was on state charges, said they had no choice but to acquit the R&B star because the girl - by then an adult - did not testify.
On the stand on Thursday, Jane conceded she lied to a state grand jury in 2002 when she said it was not her in the video.
"I was afraid something bad would happen to Robert," she told jurors about why she did not tell the truth then, referring to Kelly by his full first name. "I was protecting him."
"I also did not want that person to be me. I was ashamed."
Jane remained on the witness stand for more than four hours for the government.
Kelly's attorney was scheduled to get her chance for cross-examination on Friday morning local time.
A prosecutor asked Jane why she decided in recent years to begin speaking honestly about what happened with Kelly, who Jane said she continued to care for and sometimes live with into her 20s.
"I became exhausted living with his lies," she answered.
Earlier, Jane became emotional when she was asked to explain why Kelly can be seen handing money to her in the video.
She said it was a precaution against anyone accusing him of abusing a child if the video ever fell into the hands of authorities.
"If anyone saw the tape ... he wanted it to appear as if I was a prostitute," Jane said.
She described her parents confronting Kelly in the early 2000s. Kelly dropped to his knees and begged her parents to forgive him, Jane testified.
Earlier, she testified Kelly sexually abused her "hundreds" of times before she turned 18 years old, starting when she was 15.
She said they were having oral sex in the video and that she was 14 at the time.
Jane told jurors that in the late 1990s, when she was 13, she asked the Grammy award-winning singer to be her godfather because she saw him as an inspiration and mentor.
A federal judge in New York sentenced Kelly to a 30-year prison sentence this year for his 2021 conviction for using his fame to sexually abuse fans.
During opening statements on Wednesday, prosecutor Jason Julien sought to prepare jurors for the testimony of accusers including Jane, reminding them a core issue at trial remained the exploitation of often scared and confused children - even though the accusers who would speak to jurors are now grown adults.
Kelly's lead attorney, meanwhile, implored jurors not to accept what she said was the prosecution's portrayal of her client as "a monster," explaining that because of intellectual challenges including illiteracy, Kelly was forced to rely on others as his career took off and was sometimes led astray by those close to him.
Jane first met Kelly in the late 1990s when she was in junior high school. She had tagged along to Kelly's Chicago recording studio with her aunt, a professional singer who worked with Kelly.
Two Kelly associates, Derrel McDavid and Milton Brown, are co-defendants. McDavid is accused of helping Kelly fix the 2008 trial, while Brown is charged with receiving child pornography. Like Kelly, they have denied wrongdoing.
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