Christopher Halliwell denies killing Becky Godden, who was last seen getting into a taxi outside a club in Swindon.
The former taxi driver told Bristol Crown Court he drove two men to a field in Gloucestershire in 2003, where they buried a large sports bag.
Miss Godden's remains were found at the site in 2011.
The prosecution alleges Mr Halliwell, 52, formerly of Ashbury Avenue, Swindon, strangled 20-year-old Miss Godden between 1 January 2003 and 3 April 2008 and buried her in Oxo Bottom field in Eastleach.
The court previously heard that he confessed to strangling her and led police to her remains but he has since denied murder.
Mr Halliwell, who is representing himself, told the court he had "no reason to lie".
The jury heard he had regularly driven the drug dealers over a period of three years from 2001 and they would pay him "three of four times" the usual fare.
"It was apparent what they were actually doing, delivering large amounts of Class A drugs. I commented on the amounts they were paying me and they said it was 'chicken feed'," he said.
He told the court he had received a call from the men in 2003 saying that they "needed to get rid of something".
"When I picked them up one of them opened the boot and they put a large sports bag in the boot."
He said he drove the pair to Oxo Bottom Field and returned to collect them an hour later.
"I didn't know at the time they had buried Rebecca. I was under the impression it was drugs, money or weapons," he said.
Mr Halliwell is already serving a life sentence for murdering Sian O'Callaghan in 2011.
Earlier, as be began giving evidence, he said: "What happened between me and Sian - my actions were brutal. What I put Sian's family through was inhuman.
"Whether I get out or not is irrelevant; whether you the jury find me guilty or not guilty doesn't matter."
The trial continues.
A man accused of murdering a woman who worked as a prostitute said two drug dealers buried her body in a field and denied he ever knew her.