Prosecutors sought to adjourn the case until April, to allow more time for them to review the main evidence in the case: Lai’s Twitter account, which he used to criticize the Hong Kong and central governments.
If convicted, the 73-year-old entrepreneur, who was led to court in chains, faces a possible maximum sentence of life in prison.
Lai, who owns pro-democracy newspaper Apple Daily, has been in custody since last week, when he was denied bail related to fraud charges concerning an alleged leasing violation at his company headquarters.
Long a thorn in Beijing's side, Lai also spent two days in police custody in August when his company, Next Digital Media, was raided by hundreds of police officers under the sweeping new national security law.
Trials under the law are heard by judges hand-picked by the city's Beijing-backed leader, Chief Executive Carrie Lam.
The law, which targets secession, subversion, terrorism and collusion with foreign forces, was imposed by Beijing in June, bypassing the city's elected representatives and forgoing public consultation.
Since then, there has been a steady drumbeat of dissident voices targeted by law enforcement. This week alone, 16 supporters of the democracy movement were arrested.
Beijing imposed the national security law on Hong Kong earlier this year after stormy protests in 2019 that started over an extradition bill and expanded to include demands for greater democracy in the former British colony.
The new law outlaws secession, subversion, terrorism and collusion with foreign forces to intervene in Hong Kong’s affairs. It has constricted free speech in the city, and democracy activists see it as a way to suppress dissent.
Meanwhile, AP reports that US Secretary of State Mike Pompeo tweeted Saturday morning Asia time that the security law "makes a mockery of justice.”
He called for Lai's release, saying his only crime is speaking the truth about China's authoritarian Communist Party government.
Lai, the highest-profile person charged under the security law, has also been arrested for other alleged offenses this year. He has been charged with taking part in unauthorized protests and with fraud over alleged violations of office lease terms.
He has advocated for other countries to take a harsher stance on China, and met with Pompeo and Vice President Mike Pence in the US last year to discuss the extradition bill, which the Hong Kong government eventually withdrew.
Pence also tweeted about Lai, saying the charges against him are "an affront to freedom loving people around everywhere.”