An apparatus and method for operating a connector of a mobile terminal are provided. The apparatus includes a connector including a plurality of pins, a plug of a peripheral device, a display unit for displaying a menu for setting a connector mode, an input unit for receiving selection of one connector mode from the menu for setting a connector mode, a main processor for connecting with a switch unit through a data line, a sound line, a microphone line, and a control line, for receiving connector mode selection information from the input unit, and for transferring switching information through the control line, and the switch unit for connecting with a subset of the pins of the connector, and selectively connecting the subset of the pins to at least one of the data line, the sound line, and the microphone line.