Introduced in 1936, the model 302 was the first Western Electric telephone without a separately mounted subset box. This “combined telephone” packed its circuitry, ringer, and anti-sidetone hardware into the phone's central housing unit, reducing the telephone to a single device. In addition, the 302's new handset, dubbed the F1, was designed to be backward-compatible with Western Electric's earlier model, the 202.

First produced in heavy pot metal and painted in standard Bell System black, the 302 was designed by Henry Dreyfuss, the renowned industrial designer who defined the look of everything from John Deere tractors and Hoover vacuum cleaners to the streamlined Hudson locomotive for the New York Central Railroad. Before he designed the 302, Dreyfuss reportedly got into a repairman's uniform and accompanied a telephone technician on his daily rounds, to learn firsthand how people used their phones and the issues they encountered.

In 1937, the 302 became available in the same colors as the 202 (ivory, grey, bronze, gold, and silver). But the painted coating proved problematic as it often chipped and scuffe...d at major points of contact. Bell received many complaints about its workmanship, but the issue was resolved in 1941, when Western Electric was obliged to switch from metal to a lighter thermoplastic body, a change necessitated by the metal shortages of World War II. During the war, Western Electric devoted the vast majority of its resources to the production of military equipment, resulting in a backlog of more than 2 million unfilled telephone orders by 1945.