Brady, 75, has been on hunger strike since 1999, but is being fed by tube at Ashworth Hospital, Merseyside.
He claims he faked psychotic episodes and wants the mental health tribunal to allow a move to a prison in Scotland.
He and girlfriend Myra Hindley murdered five children in the 1960s, burying some on moors in Greater Manchester.
The tribunal is being held in Ashworth and relayed by video to Manchester Civil Justice Centre, where the public and press are able to observe proceedings.
BBC home affairs correspondent Dominic Casciani tweeted a description of Brady "sitting in court wearing dark glasses, curly/wavy grey hair. He's got a feeding tube. He speaks with a very soft voice".
Brady was sitting between two female members of his legal team at the hearing.
Judge Robert Atherton stressed that the tribunal would not consider Brady's crimes or the whereabouts of the body of missing victim Keith Bennett.
Brady's current state of mental health was the only matter being considered, he said.
He wants to be judged sane by the tribunal and moved to a prison in Scotland, where there is no precedent for feeding a prisoner on hunger strike against his will.