According to one embodiment, a telephone system includes a plurality of telephone exchange apparatuses being connected to a communication network, and include telephone terminals, a memory stores a group table indicating correlation between groups made by dividing the telephone terminals, terminal IDs to specify telephone terminals belonging to the groups, and node IDs to specify the telephone exchange apparatus, an acquisition module refers to the group table, and acquire information about an incoming call including a node ID and a corresponding group terminal ID. For two or more candidates, from a telephone exchange apparatus belonging to a corresponding group, based on the reference result, and a controller selects a telephone terminal corresponding to information about an arbitrary incoming call from the information about candidate incoming calls obtained from the acquisition module based on a preset condition, and pick up an incoming call to the selected telephone terminal.