Internet telephony is an application that transmits voice data for conversation. Therefore it must provide high sound quality. However while audio packets are transferred through the network, they are affected by delay variations and jitters, which could result in poor sound quality of the receiving end does not have an appropriate jitter buffer to overcome network factors. This thesis introduces a buffer management algorithm that could be used to provide better sound quality for Internet phone terminals. This algorithm actively responds to both the compression algorithms that are used by the terminals, as well as to the received data to provide an improvement in sound quality. In order to verify the effectiveness of the proposed algorithm, we experimented in variance network settings. The results show that the proposed algorithm improves on the performance of the conventional buffer management algorithm.