Khaled al-Masri says he was kidnapped in 2003 while on holiday in Macedonia, flown to Afghanistan and mistreated.
His is a rare legal challenge to the US policy of “extraordinary rendition” – flying suspects to third countries without judicial process.
US Secretary of State Condoleezza Rice said this week the US does not practice or condone torture.
Human rights groups say extraordinary rendition is a violation of international law. The US maintains that all such operations are conducted within the law.
The landmark lawsuit was filed by the American Civil Liberties Union (ACLU) in a district court in Alexandria, Virginia.
It claims that former CIA director George Tenet and other CIA officials violated US and universal human rights laws when they authorised agents to kidnap Mr Masri.
The lawsuit says Mr Masri suffered “prolonged arbitrary detention, torture and other cruel, inhuman, or degrading treatment”.
Mr Masri, 42, a Lebanese-born German citizen, spoke at an ACLU news conference in Washington via a satellite video link from Stuttgart, Germany.
He claims he was beaten and injected with drugs before being taken to Afghanistan and held for five months.
Mr Masri says that once there, he was subjected to “coercive” interrogation under inhumane conditions.
Mr Masri is now seeking damages of at least $75,000 (£43,000) and an apology.
The civil rights group says the government has to be held to account over “extraordinary rendition”.
“Kidnapping a foreign national for the purpose of detaining and interrogating him outside the law is contrary to American values,” said Anthony D Romero, executive director of the ACLU.
“Our government has acted as if it is above the law. We go to court today to reaffirm that the rule of law is central to our identity as a nation.”
The case was discussed earlier in Berlin by the German Chancellor, Angela Merkel, and Secretary of State Rice.
Mrs Merkel said the US acknowledged making a mistake in detaining Mr Masri.
While refusing to comment on the case directly, Ms Rice said the US sought to rectify any mistakes made.
Both told reporters that intelligence work was an essential part of the war on terror, but should not break international law.
Before she left the US, Ms Rice admitted that terror suspects were flown abroad for interrogation but denied they were tortured.
She said suspects were moved by plane under a process known as rendition, and that this was “a lawful weapon”.