The charges relate to the country's civil conflict that erupted after Mr Gbagbo lost elections in 2010.
He is the first ex-head of state to stand trial at the ICC in The Hague.
Former militia leader Charles Ble Goude, 44, is also on trial and pleaded not guilty to the charges.
The trial could last three or four years.
As it began, Mr Gbagbo, 70, appeared relaxed, smiling and shaking hands with his defence team.
The BBC's Anna Holligan, at the trial, said he steadied himself on his desk as he replied "not guilty" as the charges were read.
One of his advisers, Abdon Bayeto, had earlier told the BBC that Mr Gbagbo's innocence was not in doubt.
He said: "There's been a parody of justice here. Somebody who has been in prison for five years with no proof."
Mr Ble Goude said: "I always did everything to bring Ivorians together."
Mr Gbagbo sparked a crisis in Ivory Coast after he refused to step down following his loss to Alassane Ouattara in the 2010 presidential vote.
There were bloody clashes between rival forces over five months in 2010 and 2011.
Some 3,000 people were killed, with Mr Gbagbo basing himself in the presidential palace.
He was arrested in April 2011 by forces loyal to President Ouattara,
backed by troops from former colonial power France, and later that year
was extradited to The Hague.
It will be the highest-profile trial
yet for the ICC, which has only convicted two Congolese warlords since
its establishment in 2002.
Mr Gbagbo and Mr Ble Goude are accused of four charges - murder, rape, attempted murder and persecution.
Reading out the charges, prosecutors cited cases including the
alleged rape of 38 women at a pro-Ouattara rally and alleged killing of
10 people by shelling at a market.
The prosecution said it currently planned to bring forward 138 witnesses.
Presiding
Judge Cuno Tarfusser said neither Ivory Coast nor its people were on
trial, and that he would not allow the court to be used as a "political
instrument".
Dozens of Gbagbo supporters gathered outside the ICC on Thursday to back the ex-president, sparking some scuffles with police.
"Our
dream to see our president walk free starts today," said one supporter,
Marius Boue. "He is truly a man of the Ivorian people."
Other
supporters gathered in the Gbagbo stronghold of Youpugon in Ivory
Coast's commercial capital, Abidjan, to follow the trial.
Gbagbo: From professor to president
- Born in 1945, Mr Gbagbo's first career was in academia as a history professor
- He was jailed for two years in 1971 for "subversive" teaching
- By the 1980s, he was heavily involved in trade union activities
- After years in exile, he returned to Ivory Coast to attend the founding congress of the Ivorian Popular Front in 1988
- Mr Gbagbo was one of the first to challenge Ivory Coast's founding President Felix Houphouet-Boigny, after multi-party politics were permitted
- Became president with the Ivorian Popular Front in 2000
Mr Gbagbo's followers accuse the ICC of overlooking alleged crimes by his opponents, many of whom are now in power.
But
this was rejected by ICC Chief Prosecutor Fatou Bensouda, who said
investigations into the pro-Ouattara camp had been "intensified".
Mr
Gbagbo is the first ex-head of state to appear at the ICC, although
Liberia's former President Charles Taylor also stood trial at The Hague.
Mr
Taylor appeared before the Special Court for Sierra Leone and was given
a 50-year jail sentence in 2012 on charges of aiding and abetting war
crimes during the civil war in Sierra Leone, which neighbours Liberia.
The ICC has been accused by some in Africa of unfairly targeting the continent.
An
attempt to prosecute Kenyan President Uhuru Kenyatta over post-election
violence failed amid allegations witnesses had been intimidated
Why did Ivory Coast descend into civil war?
The
country had been divided since 2002, with rebels in control of the
mainly Muslim north. They mostly supported Alassane Ouattara, a Muslim
whose family originate in neighbouring Burkina Faso. So when Laurent
Gbagbo refused to accept defeat to Mr Ouattara in the 2010 election,
fighting soon broke out.
Was the conflict about religion?
Not
really - more about identity. Mr Gbagbo and other southern, Christian
politicians portrayed themselves as "true Ivorians", in contrast to
northern Muslims, many of whom had foreign origins. Under Mr Gbagbo,
many northerners were not allowed to vote, while Mr Ouattara was banned
from standing for election until 2010. In western Ivory Coast, the
conflict also took on ethnic lines.
What happened during the conflict?
In
the worst cases, Ivorian security forces loyal to Mr Gbagbo shelled
areas of the main city Abidjan, where many northerners lived. The ICC
also accuses pro-Gbagbo militias of attacking members of ethnic groups
believed to support Mr Ouattara. But pro-Ouattara forces were also
accused of similar atrocities and these have not been prosecuted.
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