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 about who developed the telephone. Both Alexander Graham Bell and Elisha Gray were working on a phone at the same time. Bell managed to get to the patent office a few hours before Gray 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. He was exploring the idea of sending different frequencies simultaneously.
Bell created the first telephone by developing a crude microphone, which was a piece of parchment over a cone. When the parchment vibrated, it moved an attached needle that was in a pool of diluted sulfuric acid. As the vibrations changed, the needle varied the current carried between contacts. That current then traveled along a wire to another point, where the process would be reversed.