A method of operating a microphone system includes the steps of monitoring an I/O terminal to detect whether a signal on that terminal achieves a pre-defined logic level during a monitoring period. The I/O terminal and a second I/O terminal are configured to one of a hardware mode or a communications-bus mode depending on whether the pre-defined logic level is detected. A microphone system includes two I/O terminals and an automatic detection and mode switching circuit, as well as a communications bus interface circuit and a hardware control circuit. The mode automatic detection and mode switching circuit couples the two I/O terminals to either the communications bus interface circuit or the hardware control circuit in response to the logic level detected on one of the I/O terminals during a monitoring period.