Disclosed are a method and apparatus of processing input signals of a display appliance having a plurality of external input terminals and connected to a set top box with a plurality of external input terminals. The method comprises the steps of: detecting a connecting state to the set top box, a signal receiving state from the set top box, a signal receiving state via the external input terminals of the display appliance; selecting and outputting any one of signals supplied from the set top box and signals supplied via external input terminals of the display appliance; and during outputting the selected signal, if a user requests to output a signal inputted from any one of external input terminals of the set top box and the display appliance, selecting and outputting the selected signal.