A method of determining residue-echo threshold for the trans-hybrid echo path of a loop start (LS) trunk line, comprising the steps of estimating the impulse response of the trans-hybrid echo path, passing a speech-like signal through the LS trunk circuit and collecting the echo signal. The collected echo signal is compared to the convolution of the speech-like signal with the estimated impulse response. The difference between the convolution result and the collected echo signal is the residue echo, which represents the effect of nonlinearity. With different levels of excitation signal, a curve of residue echo power level against input signal level is obtained, and the distortion characteristics are derived from this curve.