The Bat Phone was a direct line to Commissioner Gordon's office. He kept it on a special desk under a large clear perspex cover.
The phone was red with a black button in the center where the dial would normally have been. To make a call, either Batman or the Commissioner would lift the receiver and press the button. When a call was received, the phone's base would light up and beep until the handset was answered and the button pressed by the receiver.
Other people would use the Bat Phone as well; Robin or Alfred (if Batman wasn't around), and Chief O'Hara would answer (reluctantly) if the Commissioner wasn't there. Batgirl used the Bat Phone in the Commissioner's office on occasion to speak to Batman.