The judicial inquiry, which began on Monday, will examine the possibility that Crown witness Vico Virkez may have been working for Yugoslavian intelligence services.
It will also examine the actions of police, including those of convicted murderer Roger Rogerson - who helped lead the arrests of the men.
The Croatian Six are Maksimilian Bebic, Mile Nekic, Vjekoslav Brajkovic, Anton Zvirotic and brothers Ilija Kokotovic and Joseph Kokotovic.
On February 8, 1979 Mr Virkez told police in Lithgow about a Croatian nationalist plot involving the group, who he said were planning to blow up several Sydney sites with explosives the following day.
Mr Virkez said the group was planning to target several travel agencies, a community gathering place for Yugoslavians in Cabramatta and water infrastructure.
His statement prompted a series of raids, with police later giving evidence they found explosives and detonators in Mr Virkez's black 1963 Valiant.
He said that equipment had been stolen from a nearby power station by Bebic, who at the time was his roommate in Lithgow.
Police also testified they found four mechanical clocks, circuit boards and other electrical devices, a .22-calibre Winchester rifle, a letter bomb and masking tape, as well as letters and books containing information on how to make bombs.
Mr Virkez told police it was Zvirotic and Brajkovic's idea to place the bombs with their motivation being "to keep fighting for our country".
On February 17, 1981, the Croatian Six were convicted of a conspiracy to bomb two Sydney travel agencies, a Serbian social club, the Elizabethan Theatre in Newtown, and the city's water supply pipes.
They were each sentenced to 15 years' imprisonment to date from February 8, 1979, while no non-parole period was set.
The trial ran for a marathon 172 days and heard from 111 witnesses.
The credibility and reliability of Mr Virkez were strongly challenged during the trial, with lawyers for the accused arguing he was an agent of Yugoslavian intelligence service the UDBA and had a motive to lie.
"Virkez's evidence was a critical component of the Crown case against the six men," counsel assisting the inquiry Trish McDonald SC told Monday's hearing.
"The other key components of the Crown case were evidence given by police officers of confessions made by the accused ... (and) about explosives and other material located at the homes of the accused men and evidence about the involvement of the accused in the Croatian national movement."
The men were released after serving seven or eight years of their sentences, although it was not clear exactly when or why this occurred, according to an earlier judgment ordering the inquiry.
