Malvo said Muhammad had outlined a plan for six sniper shootings a day for 30 days several months before the spree that left 10 people dead and three wounded over a three-week span.
The spree was to be followed by a bombing campaign that would target schools, school buses and children's hospitals, Malvo said.
"I said 'Why?' He didn't give me an answer," Malvo said.
Both Muhammad, 45, and Malvo, now 21, already were convicted in Virginia for a sniper murder there. Muhammad received a death sentence while Malvo was given a life term.
Prosecutors in Maryland have said they are pursuing a second trial in case the Virginia conviction is overturned on appeal and to provide justice in Montgomery County, where six of the 10 killings occurred.
Malvo told the judge that he intends to plead guilty to murder charges against him in Montgomery County.
The last time the two came face-to-face was in October 2003, when Malvo was brought in at Muhammad's first trial. Malvo refused to testify, invoking his constitutional right against self-incrimination
On Tuesday, Malvo testified in detail about the first seven shootings. In each, he said Muhammad was the triggerman. Malvo described how he acted as a spotter and saw the victims felled after each shooting.
He paused and blinked hard briefly, though, while discussing the shooting of Premkumar Walekar after hearing the sobs of Walekar's widow from the courtroom gallery.
Malvo also described the difficulty the pair had in finding a clean shot that would not be seen by witnesses.
They tried to fire a shot near Howard University in Washington, D.C, on Oct. 3 — the day in which five people were shot and killed — but there were too many people and they ended up settling on a location in the District near the Maryland line, Malvo said.
The next day, they planned to fire six shots in the Fredericksburg, Va., area. But they couldn't find a good shot, Malvo said.
"We spent hours along Route 3 (near Fredericksburg) and couldn't find anything. There were too many witnesses," Malvo said.
They finally settled on taking a shot in the parking lot of a Michaels craft store, though the two debated the best place to take a shot.
Malvo said Muhammad knew as soon as he fired that shot that the victim, Caroline Seawell, would survive.
"He told me she was not going to die but it was enough to let them know it was going to continue," Malvo said.
Malvo said he was so distraught after a six-hour conversation in July 2002 where Muhammad detailed his plans for the sniper spree that Malvo played Russian roulette, crying in a bathtub. He pulled the trigger several times before realizing the next trigger pull would be fatal.
"I just broke down. I couldn't pull the trigger," Malvo said.
Malvo, who was largely abandoned by his parents, said Muhammad "basically took me under his wing" a few months after they met in May 2000.
"He began introducing me as his son," Malvo said.
Asked by prosecutor Katherine Winfree, "Did you come to love Mr. Muhammad?" Malvo responded "yes," with his voice choking.
"Did you tell him that? Winfree asked.
"Yes," he replied, his voice again choking.
Malvo said Muhammad also planned to follow the terror campaign with the abduction of his three children whom he had lost in a custody battle. Malvo tried to dissuade Muhammad and suggested they should simply get the children and leave the country.
Shortly after the pair were arrested on Oct. 24, 2002, Malvo confessed to being the triggerman in all the shootings. But he later recanted and told mental health experts hired by his lawyers that Muhammad, 45, was the shooter in nearly all the deaths.
Pervasive fear enveloped the region as people were shot at random at gas stations, parking lots, even a school. The pair also is suspected of earlier shootings in Maryland, Alabama, Arizona, Georgia, Louisiana and Washington state.
Muhammad continues to refer to Malvo as "my son" and told jurors in the trial's opening statements that he intends to prove Malvo's innocence as well as his own.
Malvo's lawyers contended Muhammad brainwashed the teenager and turned him into a killer. They also said that well after the arrest, Malvo never fully detached himself from Muhammad despite deep anger toward him.