A PBX that couples VoIP (Voice over Internet Protocol) onto a conventional PBX based on time division multiplexing (TDM). The intelligent IP phones can take the form of either hardphones or softphones that connect either over a switched Ethernet LAN. The LAN-attached data terminals interconnect as usual. The IP phones connect to the PBX through an Ethernet port on a line card that includes an IP gateway that resolves the interface issues between the TDM bus and the switched Ethernet LAN that supports VoIP. Calls between the LAN-attached IP phones are conducted on a peer-to-peer basis using their LAN addresses, and are confined to the LAN. Calls between TDM phones also are on a peer-to-peer basis through the TDM switching matrix. Calls between a LAN-attached IP phone and a PBX-attached TDM phone go through the gateway, where protocol issues are resolved, including address translation between PBX extension numbers and Ethernet LAN addresses. See also LAN, IPBX and PBX.