Disclosed herein is a system for automatically upgrading the firmware of Internet video phones and a method of managing the system. The system includes one or more Internet video phones, an upgrade server, and a Trivial File Transfer Protocol or Hypertext Transfer Protocol (TFTP / HTTP) server. Each of the Internet video phones has information, including a company name, a language type, a version and an Internet Protocol (IP) address, and transmits information, including changed IP information, via an Internet when the IP information changes. The upgrade server performs an update using information transmitted from the Internet video phones and transmits upgrade commands to the Internet video phones when new firmware is distributed. The TFTP / HTTP server transmits the new firmware, which is requested by the Internet video phones in response to the upgrade commands, to the Internet video phones that requested the firmware.