Police chief Goncalo Amaral claimed that the couple had covered up the death of their daughter.
Kate McCann arrived for the first day of the libel trial in Lisbon against Mr Amaral accompanied by her mother Susan Healy and filmmaker Emma Loach.
The trial began with a failed attempt by lawyers for Mr Amaral to have the media excluded from the courtroom to "preserve the memory of Madeleine", before Susan Hubbard - a friend of the McCanns - took to the stand as the first witness.
Mrs Hubbard told the court the McCanns has been devastated by Mr Amaral's book, in which he claimed Madeleine had died accidentally and that her parents had been negligent.
Mrs Hubbard said this meant the McCanns "had to use all their energy to defend themselves" instead of searching for Madeleine, who vanished from the McCann's holiday apartment in the Algarve in 2007, while her parents were dining at the resort's nearby tapas restaurant.
A subsequent Portuguese documentary based on the book made the situation worse, said Mrs Hubbard, because the actors who played Kate and Gerry McCann portrayed them as "crazy, heavy drinkers".
Producer Emma Loach, a friend of McCanns, was the next to give evidence. She said: "Kate realised the people she needed help from now thought Madeleine was dead and they were implicated."
The McCanns have strongly denied the accusations and say the former detective's claims have damaged the hunt for Madeleine and exacerbated the anguish suffered by her relatives.
The family stands to gain around £1 million in damages if their legal action succeeds.
Mr McCann, a cardiologist originally from Glasgow, was not present at yesterday's hearing.
He was at the family home in Rothley, Leicestershire, looking after the couple's twins, Sean and Amelie.
It is unclear which family members will give evidence but Mrs McCann's cousin Michael Wright will appear in court.
Private investigator Dave Edgar, who assisted with the search for the missing child, is also part of proceedings.
Mr Amaral is expected to argue that under Portuguese law he is entitled to make the claims published in The Truth Of The Lie.
The former officer was removed from the Portuguese investigation in October 2007 after criticising the British police. His book is still on sale in Portugal.
Madeleine, who was then nearly four, disappeared from her family's holiday apartment in Praia da Luz on May 3 2007, as her parents dined at a nearby tapas restaurant with friends.
British detectives launched a fresh investigation into her disappearance in July - two years into a review of the case - and believe she could still be alive.
The Portuguese investigation is officially closed.