Raimundos Oki and his former boss Lourenco Vicente Martins are charged with "slanderous denunciation" and face up to three years in prison if found guilty. The trial is set to begin Friday.
Rights groups and press advocates have urged that the case be dropped.
Oki and Martins published a story in the Timor Post last year about Prime Minister Rui Aria de Araujo's involvement in a state contract for information technology services when he was an adviser to East Timor's finance minister in 2014.
The story, which said Araujo had recommended a particular company for the contract before bids opened, misidentified that company as the eventual winner of the contract.
The newspaper apologized for that error, published a front-page story on Araujo's denial and Martins, the editor, resigned. But Araujo has insisted on prosecuting under draconian laws that can be used to stifle investigative journalism.
"My story made him furious and he brought me to court," said Oki.
East Timor is one of the world's youngest democracies and its fragile press freedom has come attack with the passing of a restrictive media law in 2014. A former colony of Portugal, it was occupied by Indonesia for a quarter century until a U.N.-sponsored independence referendum in 1999 sparked violent reprisals by the Indonesian military that killed many and destroyed its economy.
Santina da Costa, current editor of the Timor Post, said journalists should not be subjected to criminal prosecutions related to their work.
"As citizens, we would be subject to the law," she said. "But the government should not charge our journalists under the criminal code."
The Committee to Protect Journalists, Freedom House and the International Federation of Journalists have urged Araujo to drop the criminal complaint.
In a July 19 letter to the prime minister, the three groups called the case an "attack on press freedom and the right to information" in East Timor. "As a matter of principle criminal prosecutions of journalists cannot be tolerated."
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