"I made a fool of him (Rana). Poor fellow was stuck in this for no fault of his. I made a fool of him in getting to assist me on what I did. I made a fool of him," Headley told Rana's lawyer Patrick Blegen.
While Headley has plead guilty, Rana has maintained that he is not guilty in the charge of "support to terrorism".
The trial is expected to last till June 15. If convicted Rana faces a possible life sentence.
The defence depicts Headley as skilled manipulator who kept his childhood friend Rana in the dark about his terrorist activity while using him as an unwitting accomplice.
Headley, a Pakistani-American, said this while being cross-examined by defence lawyer of Rana, a 26/11 co-accused and a Canadian of Pakistani origin who is standing trial after being slapped with a dozen charges in connection with the Mumbai attacks in which 166 persons were killed.