The controversy erupted when a video appeared online, showing Purnama lightheartedly saying that people were being deceived if they believed his detractors who asserted that the Quran prohibits Muslims having a non-Muslim leader.
"I understand the charges but I don't understand why I'm being accused of blasphemy," Purnama said after prosecutors read out the indictment.
Blasphemy, still considered a crime in much of the world, is a supposed insult of a religion or deity.
"It is clear what I said in the Thousand Islands was not intended to interpret the [Quran], moreover to insult Islam or the ulema," said the governor, who is more commonly known by his nickname, Ahok. Ulema is the word commonly used for religious scholars in Islam.
Outside the courthouse 100 Muslims called for Purnama to be jailed and chanted "God is great."
His two rivals in the upcoming election are both Muslims, and Purnama appears to have fallen behind one of them in opinion polls.
The trial is being broadcast on live television. The governor also has his supporters outside the courtroom.
"He is absolutely suited to be governor. The city has come a long way in terms of development," said Charles Simanjuntak, 46, a supporter of the governor who rejects the charges against Ahok.
Among the protesters opposed to the governor, one group held up a placard reading "Jailing Ahok = fair government."
Purnama's term as governor has been marked by plaudits for shaking up the city's sleepy bureaucracy and for taking steps to ease the city's notorious traffic jams. But his harsh language and insistence on clearing the city's slums has alienated many voters.
President Joko Widodo is seen as an ally of Purnama's - he has blamed "political actors" for fueling the protests, but declined to elaborate. Widodo has faced widespread criticism for not doing enough to protect the country's religious minorities.
Indonesia has the world's largest Muslim population, but the country of 250 million also has large Christian, Hindu and Buddhist communities and dozens of groups that follow traditional beliefs.