The hybrid packet and circuit switching system allows merging of packet and circuit traffic from user interface modules on a TDM bus and transfer of packet information from one module to another module or the exchange circuit information between modules. Circuit exchanges or packet transfers are performed synchronously on the TDM busses in bursts of period T, with each burst comprising a fixed number of bytes. The bursts are switched by switch 1. A routing indication common to the packet and circuit bursts is used for controlling the switching of the bursts by the switch 1. The indication is performed by piggy backing the target module address for the circuit bursts, as well as for the packet burst, with the data bursts. Marking tables needed for the circuit burst allocation are located in the user interface modules.