MOSCOW — One of Russia’s most daring and innovative directors went on trial on Wednesday, charged in a financial fraud case widely seen among the country’s intelligentsia as a test of artistic freedom.

The director, Kirill Serebrennikov, and his three co-defendants pleaded not guilty to conspiring to embezzle 133 million rubles, or more than $2 million, in government funds allocated to a groundbreaking theater festival. They face up to 10 years in prison if convicted.

“I have never stolen anything from anybody and have never organized any gang apart from a theater group,” Mr. Serebrennikov, a theater and movie director acclaimed across Europe and beyond, said in entering his plea in Moscow’s Meshchansky District Court.

Although the charges are focused on a festival that ended almost four years ago, Russia’s artistic community considers it a much larger issue revolving around freedom of expression. In their eyes, the administration of President Vladimir V. Putin, having long since tamed the news media and the country’s once politically active oligarchs, is now determined to bring the arts to heel.