Abstract: A speakerphone system (50, 70) implements automatic gain control (AGC) when it is in a talk mode. While in the talk mode, the speakerphone system (50, 70) applies a gain factor determined by conventional AGC techniques. The inverse of this gain factor is applied to the received signal to avoid the need to adapt the coefficients of an echo canceller, such as an acoustic echo canceller (AEC) (25), as the volume level changes. The speakerphone system (50, 70) determines whether it is in the talk, double-talk, or listen mode by adaptively changing energy thresholds which define these modes, in dependence on the distribution of ratios of the transmitted energy to received energy. The speakerphone system (50, 70) also varies a loop gain in dependence on the separation between the distribution of energy ratios in the talk mode and in the receive mode. This automatic loop gain adjustment ensures loop stability.