He was held in custody for two weeks before being released after his alibi checked out.
Knox revealed to ABC's Nightline why she changed her story and ended up lying, making her look even more guilty to those swept up by the salacious details of the murder.
Knox said she was broken down after 53 hours of interrogation by police.
"I was hit on the back of the head, I was yelled at, police were coming in and out of the room telling me I was a liar - it was utter chaos," she said.
Knox told Nightline police made her doubt her memory and whether or not she did stay at her boyfriend's house.
"Police told me I had amnesia and I better remember the truth," Knox said.
"And so what they were forcing me to consider was that my memories that I had, that I spent the night with Raffaele, were wrong and I needed to re-scramble my brain around to come up with the truth."
Knox claims her confession to being at the apartment the night of the murder was a false memory she conjured up as a result of the intense interrogation and she claims it's common among people wrongfully convicted.
"A lot of cases of someone wrongfully convicted include a false confession, where someone was put through coercive interrogation techniques that led them to break," she said.
After DNA evidence was found on a knife belonging to Knox's boyfriend - it was later revealed the knife had been contaminated - the couple was put on trial for murder.
In 2009 the pair was found guilty and jailed.
Knox still remembers the moment she discovered she was being convicted.
"I couldn't believe it because I still believed that it was impossible to convict an innocent person," she said.
Her hair started falling out and she even got hives over her body and she said she tried to sleep as much as she could in jail because it was "difficult to be awake".
The pair was later acquitted in 2011 after the knife was deemed to be contaminated but in 2013, the Italian Supreme Court ruled the couple had to stand trial again.
Knox was just 25 at the time.
The couple was again convicted of the murder but Italy's highest court finally acquitted them and the case was closed last year.
Another man, Rudy Guede, is serving time for Kercher's murder and was convicted in 2008.
His fingerprints were found at the murder scene but despite this, Knox was still being blamed.
Italian prosecutor Giuliano Mignini believed Knox was at the apartment with her boyfriend and Guede on the night of the murder, and they were involved in a sex game.
Mignini hunted Knox since the murder, and he believed she was guilty.
She was acting strangely, kissing her boyfriend as police carried evidence out of the apartment where her roommate had just been killed.
"Whether or not my boyfriend was comforting me outside of the house where I just found out my roommate was murdered is irrelevant because the evidence of the case proved my innocence," Knox said.
Knox believes Mignini painted this image of her, that she was a sexual deviant, which "came out of nowhere".
"That was created to justify a narrative that included my guilt," Knox said.
Mignini wanted to bring justice to Kercher but Knox claims he persisted with an error for so long he convinced himself it was true.
"I'm a victim of his persistence and error," she said.
Knox is now an advocate for others who have been wrongly convicted and she has stepped back into the spotlight for the release of a new documentary about her trial.
"I'm not being hunted anymore, that means I can finally be proactive and finally look towards people who need defending," she said.
Knox will never be the same person she was when she went to Italy and she said she's forever marked by the false convictions.
With doubters saying Knox is now "cashing in" on the tragic murder and her trial, it doesn't matter to her.
"What matters to me is if I can make a difference to someone else," she said.
