The comedian and actress was longtime friends with Susan Berman, whom Durst is accused of shooting and killing 20 years ago.
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"Did you ever know Susan Berman to represent Bob Durst in a bad light?" Deputy District Attorney John Lewin asked.
"No," said Newman.
"Is it fair to say that Susan Berman almost worshiped Bob?" asked Lewin.
"Yeah," Newman replied.
The prosecution witness testified that before Berman was killed she had told her that she had provided a false alibi for Durst in connection with the disappearance of his first wife.
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"I knew it to be a false alibi," said Newman, "from her telling me that."
The defense questioned Newman's memory due to her previous drug use and pointed out that Berman had rescinded her alleged alibi.
"I think that she sensed that she had told me something that I didn't approve of and wanted to backpedal because she didn't want to be in trouble," said Newman.
The murder trial resumed last month after more than a year delay due to the pandemic.
Durst's attorney said the 78 year old did not kill his close friend and confidant. He said Durst found her dead inside her home.
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Newman said Berman loved Durst and would have done anything for him. The comedian testified she was telling the truth.
"If you're trying to drive a point to the idea that I would say something that didn't happen, that's not true," said Newman.
Jurors have gone home for the week. Testimony is set to resume Monday morning.