The Historical Institutional (HIA) Abuse Inquiry was shown a handwritten letter sent to the Belfast Welfare Authority in which it was claimed boys were being regularly assaulted by the house warden Joseph Mains.
The letter, dated September 1967 also described how one boy, known only as R5, was sent to bed early, made to scrub floors and work in the garden for rejecting Mains' advances.
R5 wrote: "I first realised something was wrong as far as Mr Mains was concerned.
"Very often when boys were washing he would come into the washroom and put his arms around our chests and hold us tightly to him.
"Also, sometimes as boys walked past him in the home he would touch them up."
The long running inquiry, at Banbridge Courthouse, is examining allegations of state sponsored child prostitution, blackmail and cover up.
There have been persistent allegations that a high-ranking paedophile ring preyed on vulnerable teenage boys at Kincora during the 1970s.
It is further alleged that the UK security services knew about the abuse but did nothing to stop it, instead using the information to blackmail and extract intelligence from the influential men, including senior politicians, who were the perpetrators.
In a statement given to police in the 1980s, R5 recalled how Mains had become jittery, frightened and offered him cigarettes and possibly money when he heard that the complaint had been lodged with the authorities.
It also emerged that another boy reported allegations of child sex abuse in two detailed letters in 1971.
The five-page documents, also shown to the inquiry, were delivered to the Belfast Welfare Authority and to the office of a social worker with a reference that they should be handed into a central police station.
However, Joseph Aiken, counsel to the HIA said the reference to give the letter to police was "missed" and detectives did not receive the information until 1976.
In 1981, Mains and two other senior care workers, deputy warden Raymond Semple and house-master William McGrath were convicted for abusing boys at Kincora during the 1970s.
A year later, a detective from Sussex Police, who had been looking into the allegations of a paedophile ring said many of the residents had been "sexually naive youngsters".
"It is difficult for an investigator to believe that persons in authority did not know or suspect what was taking place," the detective noted.
Statements from a number of boys who were placed in Kincora during the 1960s were put to the inquiry throughout the day.
Although they included graphic details of extent of the abuse by staff members, none claimed to have been aware of a vice-ring.
One boy, referred to as R7, who was abused at the age of 16, said: "I was not aware of any prostitution or vice ring or important people being involved.
"The only homosexual behaviour I know of at the hostel concerned Joseph Mains and Raymond Semple," he said.
Another, given the cipher B3/R1 said: "I have no knowledge of politicians, police or such people involved in any such activity.
"When I read of the goings on, I was very surprised. I knew nothing of prostitution and homosexual relations with fellas outside the hostel. If it was happening there I would have known of it."
Some boys described being abused while bathing or changing while others said it happened on an almost daily basis.
There was also abuse among peers, the inquiry heard.
Another ex-resident, known only as R4, said he had grown used to being assaulted by Mains but did not like it and feared speaking out.
On Wednesday, the inquiry was told that MI5, MI6 and the Ministry of Defence could find no evidence that officials were involved in, condoned or exploited the sex abuse at Kincora.
Outside the court, solicitor Claire McKeegan, who is acting for a number of victims, said the claims would be treated with caution.
"We look forward to hearing full and detailed evidence of exactly what agencies of the state knew and when they knew it," she said.
The inquiry continues on Friday.