Jean Monceau said he regretted going ahead without official written consent from her family as French law required but insisted he did not realise he was doing anything wrong at the time.
Harrods boss Mohamed al Fayed, whose son Dodi also died in the crash, has claimed the procedure was ordered by MI6 to obliterate chemical traces of a pregnancy.
Mr al Fayed believes Diana was carrying Dodi's baby and was murdered to prevent the mother of the future king having a Muslim child.
But Mr Monceau told the London inquest into the Princess's death the embalming was done because of fears that her body was deteriorating.
Mr Monceau estimated he had embalmed 13,000 bodies before the Princess's, and he lectures on the subject across Europe.
"If I had known at the time that it would lead to such investigations, to my being questioned so many times, I would have waited until the next Monday," he said.
"I would have waited until I would have received all the necessary official authorisations."
Mr Monceau said the embalming at the Pitie-Salpetriere Hospital started at 2pm on August 31 1997, 10 hours after Diana was declared dead, and took two hours.
"It was not possible to present the body in the state that it was, without any clothes on and only prepared with dry ice," he said.
The jury also heard from Maud Coujard, who as a deputy public prosecutor, authorised the release of Diana's and Dodi's bodies at 8am on August 31.
She did not recall playing any part in the decision to embalm.
The inquest was told Diana's body was not taken to a refrigerated mortuary for security reasons.
The hearing continues.
http://www.news.com.au/features/diana-embalmed-illegally/story-e6frfloi-1111114929742