Piers Morgan told the Leveson Inquiry that he had no knowledge of phone hacking while editor at the Daily Mirror.
He added that he never dealt directly with private investigators during his tenure at the tabloid.
"I was never directly involved," he said. "This was dealt with through the news desk or the features desk so, like most editors, you just would not get directly involved."
Morgan added: "But certainly all journalists knew they had to operate within the law. That was enshrined in their contracts of employment."
Morgan became the News of the World's youngest editor in 1994, aged 28. From there, he went on to edit the Daily Mirror for nine years from 1995.
He admitted that journalists in his charge did use Benji "The Binman" Pell, a Fleet Street figure known for rifling through celebrity rubbish bins to secure stories, but denied it was illegal.
"Did I think it was on the cusp of unethical? Yes.
"If you threw something away you are disregarding it and you clearly have no use for it and it is going off to the rubbish tip," he said.
Giving evidence via videolink, the former editor said he “did not believe” he had ever heard tapes of phone-tapped messages, though he did admit to hearing a tape from an unnamed source of a conversation between Paul McCartney and Heather Mills.
“I don’t think it was unethical,” he said, refusing to divulge who played the tape or where.
“I can’t go into details of the message without compromising my source.”
In a touchy exchange, the CNN anchor told the investigation that Clive Goodman, the former News of the World Royal Editor, sentenced to prison for phone hacking, was “made a scapegoat” for a wider problem. He added that he first heard of rumours of hacking in 2007, after Clive Goodman was sentenced.
In regards to his 2009 Desert Island Discs interview, in which he said the net of people practising hacking was “very wide”, Morgan said he was only referring to the “dark arts” of journalism, rather than phone tapping. He said "dark arts" included using paparazzi and private investigators.
"Every media organisation will use it [the dark arts] in the process of gathering news."
Referring to an interview in GQ Magazine, first published in 2007, in which Morgan said “it was pretty well know if you didn’t change you pin code when you bought a phone, journalists could tap into it.” He said there was a misconception that journalists broke into houses and planted bugs.
The journalist was repeatedly asked about sections of his book The Insider: The Private Diaries Of A Scandalous Decade.
Morgan denied that he had become aware of phone hacking via a story offered to his newspaper in 1999 from Welsh salesman Steven Nott detailing how phones can be hacked.
In a closing statement, Morgan said his questioning had been like "a rock star forced to listen to his back catalogue with all the worst hits highlighted."
Morgan is the latest high profile figure to give evidence to the Leveson Inquiry.
The former News of the World editor, who took charge of the now-defunct News International title in 1994 before being tempted away the following year to edit the Daily Mirror, now works for CNN in the United States and will give his evidence via video link.
Morgan came under scrutiny when Heather Mills, the ex-wife of Sir Paul McCartney, claimed that a Daily Mirror journalist admitted to her that he had hacked into her voicemail when Morgan was editor of the paper between 1995 and 2004.
Before Morgan's appearance, the Inquiry, which is now into its fifth week, will hear from former News of the World TV editor, Sharon Marshall, lawyer Julian Pike, journalist Chris Johnson who represents the National Association of Press Agencies and the General Secretary of the British Association of Journalists, Steve Turner.
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