In the past few years, Internet telephony has gained tremendous attention due to the growing use of the Internet. Internet telephony is likely to substitute traditional telecommunication technology because the functionalities of Internet Phone systems are more efficient and better than those of traditional telephone systems. The most significant advantage of Internet Phone systems is that they provide an economical way to make international communication, which is vital to corporations with multi-international sites. This project covers the issues related to implementing a Voice Over Internet Protocol (VOIP) system to provide real-time voice communication over a common Local Area Network (LAN) infrastructure. The LAN based IP telephone system was built depending on the functionality of the NetMeeting Software Development Kit (SDK) and the Visual Basic (VB) programming language. The objects of the ActiveX control were used for embedding the functionality of the NetMeeting on the VB codes. LAN based IP telephone system was tested on a LAN network with 12 Personal Computers (PCs) and the results were satisfactory from the point of view of voice quality and time latency under different conditions of LAN traffic. /p>