Abstract: A network based distributed private branch exchange (PBX) system is described. Telephony clients communicate using regular telephone sets connected to telephony client modules installed in a host computer. Central office (CO) telephone lines terminate on telephony server modules installed in another host computer. A telephony server provides call switching functionality to the system. To transfer voice over the network, analog voice data is first digitized, packetized and then placed onto the network by the host computer. At the destination host computer, the packets are depacketized and converted back to analog voice. Packets generated from digitized voice data are no treated no differently on the network then regular non-voice traffic and are not given any special priority over non-voice traffic. The system includes client related features typically found in conventional PBX equipment such as call forwarding, conferencing, transfer, park, etc.