On March 10, 1876, Alexander Graham Bell successfully tested the first practical telephone. The initial test was accidental. It happened when Bell spilled some acid on his leg and called out for Watson to come and help him. Watson heard Bell request through the telephone instrument that they were working on.
To this day there have been many different claims on who developed the telephone. Both Alexander Bell and Elisha Gary were working on a phone at that same time. Bell managed to get the to the patent office a few hours before Gary and thus was able to file first. Bell was actually working on the problem of how to send more than one message at a time on the telegraph. Bell was working on the idea of sending different frequencies at that same time.
Bell created the first telephone by created a crude microphone which was a piece of parchment over a cone. When the parchment vibrated it moved an attached needled that was in a pool of diluted sulphuric acid as the vibrations changed it moved the needle that would then vary the current being carried between contacts. That current then traveled along a wire to a another point where the reverse would take place.