US magistrate Steven Locke has ruled that DiCaprio, 41, can be deposed in court on what he knows about the production of the film.
The lawsuit was brought by lawyer and investment banker Andrew Greene against Paramount Pictures Corp and others in 2014.
Mr Greene is claiming more than $50m, saying that the portrayal of Nicky "Rugrat" Koskof defames him, portraying him as "a criminal and drug user with misogynistic tendencies".
In the 2013 film, Koskof engaged in illegal and unethical acts, also using cocaine, sexually engaging with a prostitute and shaving a woman's head.
Koskof was close friends with DiCaprio's character Jordan Belfort, a stockbroker who cost investors tens of millions of dollars during the 1990s.
Paramount says the character of Koskof is fictional and based on a number of people.
Their lawyers wrote in court documents: "No reasonable fact finder could claim that 'Nicky' was a recognisable likeness of Andrew Greene."
DiCaprio's lawyers, who had opposed the request to make him testify, said he had not written or directed the film.
They added that Mr Greene's lawsuit did not accuse DiCaprio of providing the defamatory content or deciding to include it.
Mr Greene's lawyers have not sought to depose actor PJ Byrne, who played Koskof.
Martin Scorsese, who won an Academy Award for directing the film, has already been deposed.