A watch phone and a method for handling an incoming call using the watch phone are provided. In the watch phone, a display device includes a touch screen panel and a display, turns off the touch screen panel in a watch mode, turns on the touch screen panel in an idle mode or upon receipt of an incoming call, and displays at least two areas for call connection and call rejection, upon receipt of the incoming call. A single mode selection key selects one of the watch mode and the idle mode. A controller performs control operations so that the touch screen panel is turned off in the watch mode and is turned on in the idle mode or upon receipt of the incoming call, and connects or rejects the incoming call, when the at least two areas for call connection or call rejection, which are displayed upon receipt of the incoming call, are pointed to or dragged to.