Telephone is at the intersection of Farm roads 273 and 2029, twelve miles northeast of Bonham in northeastern Fannin County. While settlers had moved into the vicinity as early as the 1870s, the community was not established until around 1886. It was named for the fact that the only telephone in the area was in the local general store owned by Pete Hindman. Apparently postal authorities had repeatedly refused Hindman's applications for a post office in his store because the names he submitted for it were already being used by other Texas post offices. The merchant finally submitted the name Telephone. The name was accepted, and the post office was opened in 1886. By 1890 the community population had reached thirty, and it reached 100 on the eve of World War I. The number of residents remained at about that level through the mid-1930s, when the population stood at ninety-nine. The community had eight businesses in 1936. Unlike many rural communities, however, Telephone grew noticeably during the late 1930s and early 1940s. By the mid-1940s it had ten businesses and 280 residents, a population that was reported through the 1960s. Eleven businesses operated locally by 1967. In 1990 Telephone reported a post office, six businesses, and 210 residents. The population remained the same in 2000.