Paolo Gabriele said his cell was so small he could not extend his arms, and the light was kept on permanently.
The judges have ordered an inquiry into his allegations.
Mr Gabriele has pleaded not guilty to theft, but admits abusing the Pope's trust and photocopying documents.
He said he leaked the papers, which revealed alleged corruption at the Vatican, because he thought the Pope was being manipulated.
Responding to his allegations of maltreatment, the Vatican police said conditions inside the police security room respected international standards and Mr Gabriele's rights were never violated.
The light was left burning for security reasons and to prevent him harming himself, it said.
Explaining the motives which led him to take home a pile of official Vatican correspondence home, Paolo Gabriele gave the court a devastatingly frank account of his daily life in the shadow of Pope Benedict on the top floor of the Apostolic Palace, says the BBC's David Willey in Vatican City.
The message that has come out of the Vatican, on the day of the second session of the trial of Paolo Gabriele, is not quite what the men who control the policy buttons in the sacred palaces would have wished.
Pope Benedict, shocked and saddened at what he clearly regards as an act of betrayal by his former manservant, had asked for maximum transparency. Tuesday's evidence may not exactly have been what he expected.
Mr Gabriele has lambasted the Vatican police for putting him in solitary confinement after his arrest last May in a cramped cell, with the light left on day and night, making it difficult for him to sleep, and without a pillow for his head.
The Vatican tribunal wants to wrap up the trial by the weekend, before the arrival in Rome next week of 200 Catholic bishops from around the world due to discuss the New Evangelisation at a three-week Synod. This month also marks the 50th anniversary of the Second Vatican Council which radically transformed Church policies in the 20th Century.
But so far the butler's trial has eclipsed all other Vatican news this week in the world's media.
He said he began photocopying confidential documents as long ago as 2010. But he insisted in court that he had acted alone, adding that he had "many contacts" in the Vatican where there was "widespread unease".
At first, he had no intention of leaking them for publication.
"I was looking for someone in a position of authority to whom I could let off steam in confidence," he told the court.
"The situation inside the Vatican had become intolerable - not only to me. There were many other people who felt the same way as I did."
But the president of the three-man tribunal interrupted the former butler when he tried to explain why he felt Pope Benedict was not sufficiently informed about "certain matters".
This was not relevant to the charge of aggravated theft, the judge said.
Mr Gabriele went on: "I made two copies of important documents in order to prove that I had done this, and was ready to pay the consequences. I was not the only one over a period of years to provide documents to the press."
He faces up to four years in prison if convicted, but he could be pardoned by Pope Benedict XVI.
The files, which revealed allegations of corruption and infighting at the Vatican, were leaked to the media, triggering a major scandal.
There has been speculation that Mr Gabriele had accomplices as he set about leaking the Vatican's secrets, says the BBC's Alan Johnston in Rome.
The Pope's private secretary, Georg Gaenswein, also gave evidence, testifying about the daily routines of the papal household and the moment he began to suspect Mr Gabriele as the source of the leaks.
He said he realised three documents that appeared in a book - His Holiness: Pope Benedict XVI's private papers - could only have come from the office he shared with Mr Gabriele and the Pope's other private secretary.
As soon as he had read the book, he told the court he had asked the Pope's permission to quiz members of the small papal family over the leaked documents.
Cristina Cernetti, one of the four nuns who work in the 85-year-old pontiff's household, said she knew immediately that Mr Gabriele was responsible.
She told the court that she could exclude all other members of the papal family, according to a Reuters report.
The trial will resume on Wednesday.
The chief judge said the court hoped to reach a verdict by the end of the week.
No TV cameras or recorders are being allowed inside the courtroom for the most high-profile case to be held in the Vatican since it was established as a sovereign state in 1929. Coverage of the trial is restricted to just eight journalists.
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