The first telephone exchange opened in New Haven, Connecticut in 1878. The switchboard was built from "carriage bolts, handles from teapot lids and bustle wire" and could handle two simultaneous conversations.

Later exchanges consisted of one to several hundred plug boards manned by operators. Each operator sat in front of from one to three banks of ¼-inch bantam jacks fronted by several rows of phone cords, each of which was the local termination of a phone subscriber line. A calling party (known as the subscriber), would lift the receiver, a light near the plug would light, and the operator would switch into the circuit to ask, "number please?" Depending upon the answer, the operator might plug the plug into a local jack and start the ringing cycle, or plug into a hand-off circuit to start what might be a long distance call handled by subsequent operators in another bank of boards or in another building miles away. In 1918 the average time to complete a long-distance call was 15 minutes.• In the ringdown method, the originating operator called another intermediate operator who would call the called subscriber, or passed it on to another intermediate operator.• This chain of intermediate operators could complete the call only if all of the intermediate trunk lines were available at the same time. In 1943 when military calls had priority, a cross-country US call might take as long as 2 hours to request and schedule in cities that used manual switchboards for toll calls.

On March 10, 1891, Almon Strowger, an undertaker in Topeka, Kansas, patented the Strowger switch, a device which led to the automation of the telephone circuit switching. While there were many extensions and adaptations of this initial patent, the one best known consists of 10 layers or banks of 10 contacts arranged in a semi-circle. When used with a dial telephone, each pair of numbers caused the shaft of the central contact "hand" to first step up a layer per digit and then swing in a contact row per digit.

These step switches were arranged in banks, beginning with a line-finder which detected that one of up to a hundred subscriber lines had the receiver lifted "off hook". The line finder hooked the subscriber to a "dial tone" bank to show that it was ready. The subscriber's dial pulsed at 10 pulses per second (depending on standards in particular countries).

Exchanges based on the Strowger switch were challenged by crossbar technology. These phone exchanges promised faster switching and would accept pulses faster than the Strowger's typical 10 pps—typically about 20 pps. The advent of dual-tone multifrequency (DTMF) tone-signalling solid-state switches (i.e., touch tone dialing) cut off the crossbar's takeover before it could really get going.

A transitional technology (from pulse to DTMF) had DTMF link finders which converted DTMF to pulse and fed it to conventional Strowger or crossbar switches. This technology was used as late as the mid to late 1990s.

With manual service, the customer goes off-hook and asks the operator for the number. Provided that the number is in the same central office, the operator connects the call by plugging into the jack on the switchboard corresponding to the called customer's line. If the call is to another central office, the operator plugs into the trunk for the other office and asks the operator answering (known as the "inward" operator) to connect the call.

Most manual telephone exchanges in cities were common-battery, meaning that the central office provided power for the telephone circuits, as is the case today. A customer lifting their receiver would change their line status to off-hook, thereby lighting a light and sounding a buzzer on the operator's switchboard. In common battery systems, the pair of wires from a subscriber's telephone to the switch (or manual exchange) are open circuit when the telephone is on-hook or idle. There is -48VDC coming from the telephone company end across the conductors. When the subscriber goes off-hook, the telephone puts a DC resistance across the line. In manual service, this current flowing through the off-hook telephone would flow through a relay coil actuating a buzzer and lamp on the operator's console. The buzzer and lamp would tell an operator the subscriber was off-hook, (requesting service).

In large cities with hundreds of central offices such as New York City, it took many years to convert the whole city to dial service. To help automate service to manual offices during the transition to dial service, a special type of switchboard, which would display the number dialed by the customer, was used. For instance, if a customer in the Murray Hill exchange picked up the phone and dialed a number in the CIty Island exchange, the customer might never need to know the destination number was in a manual exchange. Dialing that number would connect to the CIty Island exchange inward operator, who would see the number displayed on the switchboard, and connect the calling customer to the destination.

In smaller towns, early telephones were often magneto, or crank, phones. (This is in contrast to types referred to as common battery). Using a magneto set, the subscriber turned a crank to generate ringing current, to gain the operator's attention. This could be done by dropping a metal tab above the subscriber's line, or sounding a buzzer. Dry cell batteries at the subscriber's home provided the DC power for allow conversation. Magneto systems were in use in some small towns in the U.S. as late as the 1980s.

Many small town magneto systems featured party lines, anywhere from two to ten or more subscribers sharing a single line. When calling a party, the operator would use a distinctive ring sequence, such as two long rings, one short. Everyone on the line could hear the rings, and of course could pick up and listen in if they wanted to do so. On rural lines which were not connected to a central office (and thus not connected to the outside world), subscribers would be responsible for cranking the correct sequence of rings to reach their party.