The allegations led Lieberman, a key ally of Prime Minister Benjamin Netanyahu, to resign from cabinet two months ago.
As head of the ultra-nationalist Yisrael Beitenu faction, he joined forces with Netanyahu's right-wing Likud in last month's general election. The joint list came first in the ballot but with fewer parliamentary seats than forecast.
Netanyahu is trying to put together a governing coalition and it is unclear whether he will hold open the foreign ministry post for Lieberman until a verdict is in.
The charges relate to the promotion of an Israeli diplomat, who admitted in a plea bargain he had illegally given Lieberman details of a police probe against the then-foreign minister.
Under Israeli law, conviction on the fraud and breach of trust charges could disqualify Lieberman from holding a cabinet post but he would be able to return to the government if he is cleared or if he receives a light, non-custodial sentence.
Lieberman remained silent throughout the hearing and did not speak to reporters as he left Jerusalem Magistrates' Court.
The court will reconvene on April 25 to begin hearing evidence.
Lieberman, who lives in a Jewish settlement in the occupied West Bank, has stoked controversy by questioning the loyalties of Israel's 1.5 million Arab citizens.
His comments have drawn accusations of racism but have also brought him a large electoral following beyond his Russian-speaking base.
Born in Moldova, Lieberman immigrated to Israel in 1978. He became administrative head of the Likud in 1993 and ran the prime minister's office from 1996 to 1997 during Netanyahu's first term. He left to form Yisrael Beitenu in 1999.
Lieberman is the latest in a string of Israeli politicians to face corruption charges in recent years. Former Prime Minister Ehud Olmert resigned in 2008 after being indicted, though he has since been acquitted of most of the charges against him.
JERUSALEM (Reuters) -- Israel's former foreign minister, Avigdor Lieberman, pleaded not guilty on Sunday to charges of fraud and breach of trust at the start of a trial that has put the ultra-nationalist's political career into doubt.