A net-aware telephone switch enabling a user to receive or send calls from/to both the Internet and the PSTN comprises a two-line switch connecting with the communication terminal for switching the outgoing call between IP call mode and PSTN call mode; a CPU, operated for sending out an IP call and receiving an IP call to/from the outside; a storage, for storing programs and data required for sending out or receiving the IP call; a connector for connecting the net-aware telephone switch with the Internet; and a bus for connecting all the above components with each other and for transferring data among them.