The trial is being held in the Pokrov Security Prison, about 100 kilometers east of Moscow.
A video from the unique and provisional court shows the Russian opposition leader in prison uniform.
His wife, Julia Navalnaja, was present at the hearing, after having asked to take part in the closed negotiations the day before.
Suspected of embezzlement
Navalny is alleged to have stolen millions of rubles in donations to his political organizations.
The Russian opposition leader is also accused of defeating the courts.
According to Marie Struthers, Amnesty International's director for Eastern Europe and Central Asia, the trial is clear evidence that the Russian authorities want to make sure that Navalny does not leave prison.
"This mock trial, in which prison guards participate instead of the media, violates international human rights law and deprives Navalny of the right to a fair trial," reads a statement from the organization.
Navalny's close colleague, Leonid Volkov, tweeted that Navalny was not sitting in his usual "cage" for a change.
That's because the whole trial was a cage, because it was held in his penal colony.
Cared for in Germany
Imprisoned regime critic Alexei Navalny is one of Russian President Vladimir Putin's best-known opponents.
He is currently serving a two-and-a-half-year prison sentence for violating the duty to report a suspended sentence, as he was cared for in Germany for a long time in 2020 after being subjected to an attempted murder with the neurotoxin novitjok.
The new trial means that Navalny's sentence can be extended for another 15 years.