A speakerphone which employs non-linear amplifiers to compress transmit and receive signals, and level detectors to determine levels of the compressed transmit and receive signals. Compressed transmit and receive signal levels are compared against one another by a comparator with hysteresis, to enable one of two speakerphone modes of operation--either a transmit mode or a receive mode. Fixed attenuators are switched into either the receive signal path or into the transmit signal path, depending upon the current speakerphone mode. The speakerphone functions described herein are readily implemented using inexpensive control circuitry and a standard telephone line interface, which can be shared by a telephone handset and other components of an integrated telephone system.