The present invention comprises an improved telephone system and method that determine the identity of the callee of an incoming telephone call. A distinctive ring is selected by one or more of the users of the telephone prior to activating the feature or at a later time. Information about the individual distinctive ring signals is stored in memory inside the telephone. When an incoming call is received from an external party, the telephone determines which one of the users is the callee of the telephone call. A distinctive ring signal is then generated corresponding to the identified callee of the incoming telephone call. The distinctive ring signal identifies the callee of the incoming telephone call to the telephone users. In order to identify the callee of the incoming telephone call, the telephone system, after answering the incoming telephone call, inquires the caller for the identity of the callee. In another embodiment, a callee is identified using voice recognition techniques. After answering a call, the telephone, using a prerecorded message, asks the caller to say the name of the callee. The telephone voice-processes the received voice signals in order to determine the identity of the callee. The telephone then generates a distinctive ring corresponding to the identified callee that identifies the callee to the telephone users.