Polanski is suing Vanity Fair publishers Conde Naste for a 2002 article that said he made sexual advances to the women in a New York restaurant while en route to the funeral of his slain wife, Sharon Tate.
The magazine, which denies libeling Polanski, has admitted the incident it reported actually happened about two weeks after Tate was slain by cult followers of serial killer Charles Manson.
Farrow, who has been friends with Polanski since they filmed "Rosemary's Baby" together in 1968, told the court she was with the director in New York when the incident reported by Vanity Fair allegedly happened.
She said the director was so distraught; he could speak of nothing but the Manson killings and paid no attention to women flirting with him.
Polanski testified via video hookup from Paris on Monday. He has refused to enter Britain out of fear of extradition to the United States, where he was convicted years ago of having sex with a 13-year-old girl.