Jennifer Mercado was granted immunity from prosecution before being called to testify Tuesday.
Hernandez is charged with the June 2013 killing of Odin Lloyd, who was dating the sister of Hernandez's fiancee.
Mercado's sister, Tanya Singleton, pleaded guilty to criminal contempt for failing to testify before a grand jury investigating the killing. Singleton has pleaded not guilty to conspiracy to commit accessory after the fact. Prosecutors say she helped a Hernandez co-defendant Ernest Wallace flee after the killing.
Mercado on Tuesday was testifying about Wallace and Hernandez's other co-defendant, Carlos Ortiz. Wallace and Ortiz have pleaded not guilty and will be tried later.