The batphone was a direct line to Commissioner Gordon's office. He kept it on a special desk under a large glass cover.
The phone was red with a button in the center where the dials would 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 base would light up and beep until the handset was answered and the button pressed by the receiver.
Other people would use the Batphone 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 phone in the Commissioners office on occasion to speak to Batman.