A witness heard “non-stop shouting” coming from the home of athlete Oscar Pistorius before shots were fired early on 14 February, say South African prosecutors.
Mr Pistorius is facing a charge of premeditated murder of his girlfriend, Reeva Steenkamp.
On Tuesday Mr Pistorius told the court he shot her through a bathroom door after mistaking her for an intruder.
It is the second day of his bail hearing in Pretoria.
A full trial of the Paralympic star, 26, is not expected for months.
Mr Pistorius arrived at the court building on Wednesday morning in a police car with a blue blanket covering his head.
Courtroom proceedings were delayed as journalists and onlookers tried to get into the court. One journalist fainted in the scrum.
The magistrate has deemed this a schedule six case – meaning Mr Pistorius is accused of premeditated murder.
The defence will have to prove the extenuating circumstances that would justify granting bail, the BBC’s Andrew Harding in Pretoria says.
As the prosecution began setting out its case on Wednesday, it said a witness had testified to hearing “non-stop talking like fighting” between the hours of 02:00 and 03:00.
Mr Pistorius claims he was asleep until only moments before the shooting and that there was no argument between the couple.
Ms Steenkamp was “dressed” at the time of the shooting, the prosecution said.
The chief investigating officer Hilton Botha then took the stand, saying he arrived at the house at 04:15 and found Ms Steenkamp lying dead on the ground floor.
She was wearing white shorts and a black vest and was covered in towels, he said.
Mr Botha said a memory stick was recovered with details of Mr Pistorius’s offshore bank accounts – and claimed that made him a flight risk.
“We don’t want another Dewani case,” he said – referring to Shrien Dewani, who is in the UK fighting extradition to South Africa where he is wanted on charges of plotting to kill his wife Anni in 2010.
He said Ms Steenkamp had been shot in the right side of her head, her right hip and her right elbow.
Mr Pistorius has once again begun crying, says the BBC’s Andrew Harding in the courtroom.
Two days were set aside for this bail hearing, but it now looks as though it might not be completed until the end of the week, says the BBC’s Peter Biles outside the court.
The first day of the bail hearing on Tuesday coincided with Reeva Steenkamp’s funeral.
The 29-year-old model and law graduate was cremated in her home town of Port Elizabeth.
Her father, Barry Steenkamp, told reporters: “We have to keep Reeva in our hearts forever.”
The case has aroused huge interest both in South Africa, where Oscar Pistorius is regarded as a national hero, and around the world.
He is a multiple Paralympic champion, winning gold medals at the 2004 Games in Athens, at Beijing 2008 and at London 2012.
In London he made history by becoming the first double amputee to run in the Olympics, progressing to the semi-finals of the 400m.