Squelch is responsible for determining when valid data is present on the differential receive inputs. The squelch circuitry employs a combination of amplitude and timing measurements (as specified in the IEEE 802.3 10BASE-Te standard) to determine the validity of data on the twisted-pair inputs.

The signal at the start of a packet is checked by the squelch, and any pulses not exceeding the squelch level (either positive or negative, depending upon polarity) are rejected. When this first squelch level is exceeded correctly, the opposite squelch level must then be exceeded no earlier than 50ns. Finally, the signal must again exceed the original squelch level no earlier than 50ns to qualify as a valid input waveform, and not be rejected. This checking procedure results in the typical loss of three preamble bits at the beginning of each packet. When the transmitter is operating, five consecutive transitions are checked before indicating that valid data is present. At this time, the squelch circuitry is reset.