A combined sidetone and hybrid balance apparatus and method of operating same are disclosed. An embodiment of the present invention may provide both a hybrid balance mode of operation and a sidetone generation mode of operation within a single integrated circuit device. The functionality provided by an embodiment of the present invention may be used in both Internet protocol (IP)-based telephones and residential gateways, and may be incorporated within the IP telephone chip used in such devices. An embodiment of the present invention may be used to reduce processor demand and the cost of materials, permitting greater IP telephone or residential gateway functionality at lower cost.