A speaker module of a portable terminal and a method of execution of a speakerphone mode using the same are provided. The speaker module includes a nondirectional microphone, a directional microphone, at least one speaker, and a controller. The nondirectional microphone is applied to one side of the portable terminal. The directional microphone is applied to another side of the portable terminal. The at least one speaker is installed in the same direction near the directional microphone. When the portable terminal is in a speakerphone mode, the controller controls to detect voice signal levels and/or frequency characteristics input to the two microphones, sets a transmission/reception mode of the portable terminal, and mute-processes a corresponding microphone.