A digital telephone answering device having speakerphone capability allows a recorded message to be played back and heard by the far-end party as well as over the local speakerphone by the near-end party during speakerphone operation as if it were a normal receive signal. Moreover, normal speakerphone conversation is possible during this conversational playback mode allowing the far-end party and/or near-end party to break-in over the played back pre-recorded message as desired and be heard by the other party. Both message and conversation signals are preferably (but not necessarily) at similar levels. Also, the message playback at the near end is preferably (but not necessarily) subject to the same speakerphone digital volume control as that received at the far end.