Chelsea and England defender Terry, 31, is accused of calling Ferdinand a "f****** black c***" during a Premier League match last year.
Appearing at Westminster Magistrates' Court, Terry sat in the dock wearing a light grey suit, white shirt and pink tie. The court heard that Terry told Queens Park Rangers player Ferdinand to "f*** off" and also called him a "f****** k*******" as the pair exchanged insults.
Opening the prosecution, Duncan Penny said: "The Crown alleges that the defendant, most probably in response to physical gestures being made by Mr Ferdinand which the defendant understood to refer to the well-publicised allegation of an extra-marital affair with a team-mate's wife, shouted at Mr Ferdinand."
He went on: "The Crown's case is that the words were abusive and insulting in a straightforward sense and that the term 'f****** black c***' was uttered as an abusive insult demonstrating hostility based on Mr Ferdinand's membership of a racial group."
Terry maintains he was only sarcastically repeating words that Ferdinand wrongly thought he had used. He is accused of a racially aggravated public order offence, which he denies.
Giving evidence, Ferdinand said: "He called me a c*** and I called him a c*** back and he gave me a gesture as if to say my breath smelled. I said to him, 'How can you call me a c***? You shagged your team-mate's missus, you're a c***'."
This was a reference to Terry's alleged affair with Wayne Bridge's ex-girlfriend, Vanessa Perroncel. Ferdinand jogged down the pitch making a fist gesture to imply sex, he told the court.
At first Queens Park Rangers centre-half Ferdinand did not think any racist insult had been used. But after the match, his then girlfriend showed him a clip of their exchange posted on YouTube, and he believed Terry had used the racist obscenity. Ferdinand told the court that if he had realised at the time he would have told officials.
He said: "I would have been obviously very hurt and I probably wouldn't have reacted at the time because, being a professional, you can't do that. I probably would have let the officials know what happened and dealt with it after the game. When someone brings your colour into it, it takes it to another level and it's very hurtful."
Source: PA
Source: PA