Comey told the hearing that the Trump administration "chose to defame me and, more importantly, the FBI by saying the organisation was in disarray".
"Those were lies, plain and simple and I am so sorry that the FBI workforce had to hear them," he said.
White House spokeswoman Sarah Sanders told reporters after Comey's testimony: "I can definitely say that the President is not a liar."
Comey told the hearing that he believes he was fired over how he was conducting the Russia investigation.
Comey feared Trump would 'lie' about their meetings
The former FBI chief explained how he was so concerned about his encounters with the President that he took notes straight after each meeting.
"I was honestly concerned that he might lie about the nature of our meeting and so I thought it really important to document it," Comey told the hearing.
His concerns "led me to believe I've got to write it down and I've got to write it down in a very detailed way".
"I knew there might come a day when I might need a record of what had happened not just to defend myself but to defend the FBI and our integrity as an institution," Comey said.
He added that he did not feel the need to take any notes after conversations with Trump's predecessors Barack Obama and George W. Bush.
In his seven-page statement, released before his testimony, Comey described a "very awkward" one-on-one dinner at the White House where Trump said "I need loyalty, I expect loyalty".
Comey said the dinner was designed to "create some sort of patronage relationship".
"My common sense told me that what's going on here is he's looking to get something in exchange for granting my request to stay in the job."
Comey said he felt "uneasy" about the veiled request.
"The reason that Congress created a 10-year term (for the FBI director) is so that the director is not feeling as if they're serving with political loyalty owed to any particular person," he said.
"The statue of justice has a blindfold on because you're not supposed to be peeking out to see whether your patron is pleased or not with what you're doing."
Comey took Flynn request as a 'direction'
Comey also explained his "very disturbing" conversation with the President in the Oval Office, where Trump asked him to "let go" of the investigation into his former national security adviser Michael Flynn, who had resigned over his questionable ties to Russians.
The former FBI director said he took the comments "as a direction" to drop the investigation into Flynn, which Comey declined to do.
He was also concerned that Trump shooed everyone out of the room, including Attorney-General Jeff Sessions and senior adviser Jared Kushner, before their conversation.
"My impression was something big is about to happen; I need to remember every single word that is spoken," Comey said.
One senator asked why Comey did not tell Trump at the time that he felt his request about Flynn was improper.
"Maybe if I were stronger I would have. I was so stunned by the conversation that I just took it in," he said.
How Comey's memos were leaked
Comey has revealed that he leaked his own memos of his meetings with Trump in the hope that it would lead to a special prosecutor being appointed to investigate the President's request to drop the probe into Flynn.
Trump tweeted in May that "James Comey better hope that there are no 'tapes' of our conversations".
During his testimony, Comey said: "I've seen the tweet about tapes. Lordy, I hope there are tapes.
"I woke up in the middle of the night on Monday night, because it didn't dawn on me originally, there might be corroboration, a tape," he said.
"And my judgment was I need to get that out into the public square."
He gave his memos to an unnamed friend, who worked at Columbia Law School, to pass on to a journalist.
"I asked him to, because I thought that might prompt the appointment of a special counsel," Comey said.
President feels 'totally vindicated'
Trump put a positive spin on the bombshell statement from Comey, ahead of his anticipated testimony to the US Congress.
Trump's lawyer Marc Kasowitz zeroed in on one aspect of Comey's seven-page statement, released on Wednesday: the fact that he told the President three times that he was not personally under investigation by the FBI.
"The President is pleased that Mr Comey has finally publicly confirmed his private reports that the President was not under investigation in any Russian probe," Kasowitz said.
"The President feels completely and totally vindicated.
"He is eager to continue to move forward with his agenda."
The lawyer's comments came after Comey released a detailed account on all of his uncomfortable meetings with Trump.
Comey claims that Trump repeatedly demanded Comey's loyalty; that Trump urged him to "let go" of his investigation into Flynn and that he later pressured him to "lift the cloud" of the FBI probe into Russian meddling in the election.
The juiciest part of Comey's statement was his account of a "very awkward" one-on-one dinner he had with Trump in the White House soon after his inauguration.
"I need loyalty, I expect loyalty," the President said, according to Comey.
"I didn't move, speak, or change my facial expression in any way during the awkward silence that followed," Comey said in his statement.
"We simply looked at each other in silence."
Comey said the dinner was designed to "create some sort of patronage relationship".
"That concerned me greatly, given the FBI's traditionally independent status in the executive branch," he said.
In another encounter, which Comey described as "very concerning", Trump asked Comey to "let go" of its investigation into former national security adviser Flynn, who had resigned over his questionable ties to Russians.
"He is a good guy and has been through a lot," Trump said, according to Comey.
"I hope you can see your way clear to letting this go, to letting Flynn go. He is a good guy. I hope you can let this go."
In a later phone call on March 30, Trump asked Comey to "lift the cloud" of suspicion on Trump over the FBI investigation into whether the Russians interfered with the US election and whether anyone in the Trump campaign helped out.
Comey has arrived at the Senate hearing, where he will take questions from both Republican and Democratic senators.
Anticipation for the testimony was at fever pitch, with many US TV stations broadcasting the hearing live.
