Alesha Ahmed told a family friend her sister Shafilea was "stabbed" by their father and the body was "in pieces", a jury heard today.
Shafilea's parents Iftikhar, 52, and Farzana, 49, deny murdering the 17-year-old by suffocating her at the family home in Warrington, Cheshire, in September 2003.
The teenager's decomposed remains were discovered in Cumbria in February 2004 but it was not until 2010 that Alesha provided police with the "final piece of the puzzle" about her death, the prosecution said.
Giving evidence today, Sehreen Shafaat, 22, a close friend of the Ahmed children, said Alesha told her that Mr Ahmed stabbed Shafilea.
Law graduate Miss Shafaat, a trainee barrister, told the jury she had known the family as a small child and after Shafilea's death became close to the Ahmeds' other daughters Alesha and Mevish.
They attended the same college and she would frequently socialise or study with them at their home, the jury heard.
Following a study session, Miss Shafaat said she and Alesha were in her car when Miss Ahmed turned to her and said the family "were not getting on".
Miss Shafaat, wearing a black headscarf, added: "Alesha said there was no happiness and although the family looked happy on the outside, it wasn't happy on the inside."
She described Alesha as "upset" and "crying" and said: "And then she just came out with 'My dad did it'."
Miss Shafaat said she knew what Alesha was talking about and was shocked, replying: "What?"
"And she said, 'Yeah, my dad killed her'," the witness went on.
"I asked if she was serious and how (it happened).
"I didn't mean to ask how but it just came out, I didn't know what to say."
Henry Riding, for the prosecution, asked Miss Shafaat to tell the jury what happened next.
She said she couldn't remember the order in which things were said but told the jury Alesha said "something like", "My dad stabbed her and the body was all in pieces".
"I can't remember if she said she had actually seen her dad stab Shafilea," Miss Shafaat went on.
"During the conversation she told me her dad had been violent in the past and she used the word 'strangle' but I can't remember if that was to do with the incident with Shafilea or something else.
"She definitely said the body was in pieces but I can't remember exactly what else she said."
Earlier in the trial, Alesha Ahmed described how her parents pushed Shafilea on to the settee in their house and she heard her mother say "Just finish it here" in Urdu as they forced a plastic bag into the teenager's mouth and suffocated her in front of their other children.
The couple murdered their "Westernised" daughter because they believed her conduct was bringing shame on the family, the prosecution say.
Miss Shafaat told the court Alesha said the incident took place in the "kitchen/lounge room" downstairs in the house.
"(Alesha) mentioned the presence of Mrs Ahmed but I can't remember what she said," the witness added.
"She said that she and the other children had come downstairs but I don't remember if she said they saw it happen or if that was after."
Miss Shafaat told the jury Alesha told her to take the information "to her grave" and not tell anyone so she "literally put it to the back of my mind".
"She definitely used the word grave and said that I couldn't mention it to anybody," she explained.
Asked by Mr Riding if Miss Ahmed mentioned any discussion with her parents about Shafilea's death, Miss Shafaat said: "She didn't say anything about a conversation at the time Shafilea was killed, but she did say her parents did not have any regrets and they did say to the children they had 'done it before and can do it again'."
This was done as a "threat", Miss Shafaat said.
Asked about what happened after the December 2009 conversation had ended, Miss Shafaat said: "I didn't mention it to anybody, I didn't even bring it up again with Alesha."
The witness said the first time she spoke of that conversation was when she was interviewed by police.
She added: "I wasn't expecting to ever have to repeat it."