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.

Their quartet of Marcus Hellner, Lars Nelson, Johan Olsson and Daniel Richardson led from start to finish and completed the course in one hour 28 minutes 42 seconds.
The battle for silver and bronze was won by Russia - who were watched by President Vladimir Putin.
The bronze was taken by France - their first medal in the event.
A day after their women's team came from behind to earn a narrow relay victory, Sweden's anchor Hellner skied alone for the entire fourth leg and grabbed a Swedish flag to wave as he entered the stadium and proceeded unchallenged down the final straight.
Hellner started the final leg with a 14-second lead over Russia's Maxim Vylegzhanin and quickly extended the gap, eventually winning by 27.3 seconds.
It was another disappointing day for Norway, who had fallen a minute behind by the second exchange and ended up fourth, a day after their heavily favoured women also failed to get a medal.

The internet retailing giant also said it expected to report a bigger-than-expected loss in the next three-month period.
Amazon shares plunged over 10% in after-hours trading in New York.
Investors have long been wondering when Amazon will turn its significant revenues into profits for shareholders.
Amazon has been spending heavily in various new initiatives, including its Amazon Fresh grocery delivery service in the US, and its $1bn acquisition of video game streaming site Twitch.
That has hurt profits at the firm, with operating expenses growing to $21.1bn, compared with the $17.1bn last year.
Investors have been tolerant of Amazon's policy of reinvesting profits back into the firm. But patience has been wearing thin in recent months.
Shares in the firm have fallen nearly 20% since the beginning of this year.
In a statement accompanying its earnings, Amazon founder and chief executive Jeff Bezos chose instead to focus on the firm's holiday offerings during the crucial period in the run-up to Christmas.
"As we get ready for this upcoming holiday season, we are focused on making the customer experience easier and more stress-free than ever," he said.
A Roman Catholic priest took photographs of a boy after sexually abusing him, a jury has been told.
[NEXT_CONCEPT]
Defending champions Sweden took gold in the men's cross country 4x10km relay at the Winter Olympics in Sochi.
[NEXT_CONCEPT]
Amazon has reported a third-quarter loss of $437m (£273m) - up significantly from the $41m loss it reported for the same period last year.