A serving soldier admitted abusing a boy from a residential home run by Anglican missionaries in Northern Ireland but was never prosecuted, a public inquiry lawyer said.
The serviceman first came to Northern Ireland at the start of the Troubles in 1969 and visited Manor House Children's Home near Belfast to take children on day trips and play football, his testimony to police said.
Stormont's power-sharing administration has established an independent probe which has received allegations of physical and sexual wrongdoing at the institution run by the Society for the Irish Church Missions to the Roman Catholics.
Christine Smith QC, counsel for the Historical Institutional Abuse (HIA) Inquiry, said one alleged perpetrator was later interviewed by police.
"He took children on day trips, played football, and admitted having feelings for MH41 (one of the residents).
"He admitted abusing MH41 at his own home."
The alleged victim also claimed the accused's wife had sex with him.
The soldier later joined the Ulster Defence Regiment (UDR) in 1977.
In 2004 no prosecution was directed for the alleged early 1970s abuse, Ms Smith said.
The Society for the Irish Church Missions to the Roman Catholics was established to convert Catholics to Protestantism.
It ran Manor House Children's Home in Lisburn, Co Down, from 1927 to 1984 and had links to the Church of Ireland.
There was also claims of "sexual touching" among children at Manor House and in one case a girl was allegedly sexually assaulted by another child. He was moved to a different home.
In another case one offender was on bail for an offence at a home run by Barnardo's, when he was accused of another assault involving a Manor House resident.
Six people have made allegations to the inquiry of physical and sexual abuse.
Two of the witnesses have already given public evidence during an earlier module of the investigation concerning the transfer of child migrants to Australia.
Testimony is due to be taken from three people who resided at Manor House in the mid to late 1960s, while another was there for a year in the early 1970s.
The inquiry began hearing evidence of alleged wrongdoing at the home during public sessions in Banbridge, Co Down, on Monday.
The missionaries included Anglican evangelical clergy and laity in Ireland, Ms Smith told the inquiry panel.
Founded in the mid-1800s, bishops and archbishops were constant patrons but more recently growing ecumenism left many in the church feeling outreach to Catholics was "politically incorrect", the lawyer added. The organisation has had no involvement in provision of residential child care in Northern Ireland for more than 30 years.
The module of evidence is expected to last one week.
The HIA is considering harrowing claims of emotional, physical and sexual abuse at 22 institutions in Northern Ireland from 1922, when the state was founded, to 1995. It is chaired by retired judge Sir Anthony Hart and is also probing actions at homes run by the Catholic church and the state.
The inquiry was established by Northern Ireland's power-sharing ministerial Executive and is expected to make recommendations on how to compensate victims.
It is due to submit its report to ministers in a year's time.