Time-division multiplexing (TDM) is a method of transmitting and receiving independent signals over a common signal path by means of synchronized switches at each end of the transmission line so that each signal appears on the line only a fraction of time according to agreed rules, e.g. with each transmitter working in turn. It can be used when the bit rate of the transmission medium exceeds that of the signal to be transmitted. This form of signal multiplexing was developed in telecommunications for telegraphy systems in the late 19th century but found its most common application in digital telephony in the second half of the 20th century.

Time-division multiplexing was first developed for applications in telegraphy to route multiple transmissions simultaneously over a single transmission line. In the 1870s, Émile Baudot developed a time-multiplexing system of multiple Hughes telegraph machines.

In 1944, the British Army used the Wireless Set No. 10 to multiplex 10 telephone conversations over a microwave relay as far as 50 miles. This allowed commanders in the field to keep in contact with the staff in England across the English Channel.

In 1953, a 24-channel time-division multiplexer was placed in commercial operation by RCA Communications to send audio information between RCA's facility on Broad Street, New York, their transmitting station at Rocky Point and the receiving station at Riverhead, Long Island, New York. The communication was by a microwave system throughout Long Island. The experimental TDM system was developed by RCA Laboratories between 1950 and 1953.

In 1962, engineers from Bell Labs developed the first D1 channel banks, which combined 24 digitized voice calls over a four-wire copper trunk line between Bell central office analogue switches. A channel bank at each end of the line allowed the single line to carry short portions, each 1⁄8000 of a second, of up to 24 voice calls, in turn. The discrete signals on the trunk line carried 1.544 Mbit/s divided into 8000 separate frames per second, each composed of 24 contiguous octets and one framing bit. Each octet in a frame carried a single telephone call in turn. Thus each of 24 voice calls was encoded into two constant-bit-rate streams of 64 kbit/s (one in each direction), and converted back to conventional analog signals by the complementary equipment on the receiving end of the trunk line.

Time-division multiplexing is used primarily for digital signals but may be applied in analog multiplexing, as above, in which two or more signals or bit streams are transferred appearing simultaneously as sub-channels in one communication channel, but are physically taking turns on the channel. The time domain is divided into several recurrent time slots of fixed length, one for each sub-channel. A sample byte or data block of sub-channel 1 is transmitted during time slot 1, sub-channel 2 during time slot 2, etc. One TDM frame consists of one time slot per sub-channel, and usually a synchronization channel and sometimes an error correction channel. After all of these the cycle starts again with a new frame, starting with the second sample, byte or data block from sub-channel 1, etc.

TDM can be further extended into the time-division multiple access (TDMA) scheme, where several stations connected to the same physical medium, for example sharing the same frequency channel, can communicate. Application examples include:

In circuit-switched networks, such as the public switched telephone network (PSTN), it is desirable to transmit multiple subscriber calls over the same transmission medium to effectively utilize the bandwidth of the medium. TDM allows transmitting and receiving telephone switches to create channels (tributaries) within a transmission stream. A standard DS0 voice signal has a data bit rate of 64 kbit/s. A TDM circuit runs at a much higher signal bandwidth, permitting the bandwidth to be divided into time frames (time slots) for each voice signal which is multiplexed onto the line by the transmitter. If the TDM frame consists of n voice frames, the line bandwidth is n*64 kbit/s.