In 1924, J.P. Maxfield and H.C. Harrison of AT&T devised the first recording and reproducing system using electricity. Earlier systems had used direct conversion between sound and mechanical energy only. Using microphones and amplifiers, they extended the reproducible sound range by more than an octave and appreciably improved fidelity. The recording industry adopted electrical recording in 1925 . Victor records popularized AT&T's technology under the name "Orthophonic."

Four years later, an AT&T Bell Labs group headed by H.A. Frederick discovered that surface noise on records was caused by graphite on the wax master, which was routinely deposited to provide a conducting surface for electroplating. A.C. Keller and A.G. Russell discovered that sputtering gold on the master record eliminated this surface noise. This technique was soon adopted for motion picture and broadcast sound recordings and, after WWII, for phonograph records.

AT&T also pioneered hi fi and stereo recording.