During the 1960s, in-band signaling was used, so the same line for both voice conversations and telephone connection management signals. Since a pause in a voice conversation would produce silence, another method was required for switches to determine available circuits. The solution AT&T created was to produce a 2600 Hz tone on idling trunks.
A device, known as a "blue box", was created to generate the 2600 Hz signal on a line being used. This indicated to switch that the line was idle. After the tone, the switch believed another call was starting, and used the subsequent dialed digits to connect the call.
This technique only affected interoffice multi-frequency (MF) trunks; local calls originated and terminated on the same switch. By placing a call to a non-local toll-free number, interoffice trunks were used for free. Using a blue box would then disconnect the toll-free call and let any other number be dialed. Since the phone was never physically hung up, the connection was still toll-free.
At one point in the 1960s, packets of the Cap'n Crunch breakfast cereal included a free gift: a small whistle that (by coincidence) generated a 2600 Hz tone when one of the whistle's two holes was covered. The phreaker Captain Crunch adopted his nickname from this whistle. Others would utilize exotic birds such as canaries which are able to hit the 2600 Hz tone to the same effect.
In the 1970s and 80s some trunks were modified to filter out SF tone arriving from a caller. Later in the 20th century, long-distance companies adopted the out-of-band signaling system Signaling System 7. This system separated the voice and signaling channels, making it impossible to generate these signals from an ordinary phone line.