A telephone set known as the 500 type has been in production for Bell System use for some time1. The successful outcome of an intensive study has made it possible to simplify the circuit and some of the components of this set, and thereby to increase dependability and life and significantly to reduce the manufacturing cost. This change now has been completed and telephone sets embodying the necessary modifications are in production. This paper discusses some of the problems involved in this work and outlines the improvements which have been effected. Presented also is information concerning the superior performance of the 500 set over the preceding telephone set when used in noisy locations.