A self diagnostic test routine resident in firmware in a remote, programmable device for testing telephone lines diagnostically examines the operational capability of each of a plurality of prescribed signal processing functions contained within the test device, on a selected one of a `loop` (effectively continuous) basis, `automatically`--at a less than continuous but still meaningfully periodic rate, or `on-demand`--at any time requested by the user. In addition, a running log is maintained of the results of each diagnostic test, and the results of each diagnostic test are compared with a set of thresholds associated with respectively different standards of performance of the test device. As a result of this comparison, the performance capability or status of the device is classified into one of three categories: PASS, MARGINAL, or FAIL, and communicated to system maintenance personnel.