The porn star, who claims to have had sex with the married Trump in 2006, denied that she threatened the tycoon if he did not buy her silence over their alleged encounter.
"I wanted the truth to come out... to get my story protected with a paper trail so that my family didn't get hurt," the 45-year-old said during aggressive cross-examination by one of Trump's attorneys, Susan Necheles.
The Republican presidential candidate is accused of falsifying business records to reimburse his lawyer, Michael Cohen, for a $130,000 payment to Daniels on the eve of the 2016 presidential election, when the story could have proved politically fatal.
Trump, wearing a powder blue tie, sat hunched over the defendant's table just feet away as Daniels testified in the Manhattan courtroom.
During nearly five hours of testimony on Tuesday, Daniels walked the New York jury through the details of a one-night stand she said she had with the real estate mogul after meeting him at a celebrity golf tournament.