The alleged victim, now in his 40s, was under 16 when he was at Grafton Close Children's Home, during the 1980s.
The man told the jury at Southwark Crown Court how Father Anthony McSweeney performed a sex act on him and then took out a camera.
Fr McSweeney, 68, of Pease Pottage, West Sussex, denies abusing boys at the home in Hounslow, west London.
The priest, of Old Brighton Road North, denies four counts of indecent assault, three counts of making indecent images of a child and one of taking indecent images of a child.
The alleged victim told the court the incident took place in a flat at Grafton Close belonging to John Stingemore.
The jury has been told that he abused boys during his time as the home's manager. He was due to be tried alongside Fr McSweeney but was found dead in his home last month.
When the alleged victim was asked why he did not tell anyone at the time what had happened, he replied: "Who would I tell? There was no-one else other than the staff.
"It would only get reported to Mr Stingemore.
"I felt a bit ashamed as well."
The alleged victim also described how the priest fondled him over his clothes as he sat on his lap while playing video games, and offered to help him wash as he was having a bath.
During cross-examination, Stephen Spence, defending Fr McSweeney, put it to the man that he was not telling the truth, which he denied.
The trial, which is expected to last two weeks, was adjourned until Wednesday.
A Roman Catholic priest took photographs of a boy after sexually abusing him, a jury has been told.