A blade server system with integrated KVM switches is described. The blade server system has a chassis, a management board, a plurality of blade servers, and an output port. Each of the blade servers has a decoder and a switch. Each of the blade servers further has a select button and a processor. The decoder receives an encoded data from the management board and decodes the encoded data into command information when one of the blade servers is selected. The switch receives the command information and is switched according to the command information. The command information indicates which switch is to be turned on and which are to be turned off. The output port connects the peripheral devices for controlling the selected blade server. The management board may determine which blade server is to be selected by the button condition, commands from the peripheral devices or a request from a network computer.