In a blog post on Saturday morning, Google said the phones are being distributed so that workers can experiment with new mobile features. It did not say the device will be a Google-branded phone.
But in a Twitter message earlier, a Google employee who said she has the phone referred to it as a "Google phone", fuelling the latest speculation.
Since even before Google unveiled Android, onlookers wondered if the search giant would release its own phone. Instead, it released an open source operating system that other hardware vendors can use to make phones.
In the Google blog post, Mario Queiroz, a vice president of product management, said the company gave the phone to employees as a way to test new technologies.
"We recently came up with the concept of a mobile lab, which is a device that combines innovative hardware from a partner with software that runs on Android to experiment with new mobile features and capabilities, and we shared this device with Google employees across the globe," he wrote. "This means they get to test out a new technology and help improve it."
He said he could not share specific details about the product.
The post appeared to be a response to a Twitter message posted by a Google employee Friday evening, who said she had the phone. The post, first reported by TechCrunch, sparked the new round of speculation.
"ZOMG we had fireworks and we all got the new Google phone. It's beautiful," wrote Leslie Hawthorn, a programme manager on Google's open source team.
While the term 'Google phone' has been used to describe a device built and branded by Google, many also use the term to refer to any phone running Google Android. So it was unclear if Hawthorne was talking about a device that will be branded and sold by Google.
A podcast producer for CNET said on Friday he had seen one of the phones, adding to the speculation. The hardware is made by HTC and running Android 2.1, the next generation of the software, Jason Howell wrote in a Twitter message. The phones were given to employees unlocked and the one he saw was running on AT&T's network, he said. Because it is unlocked, workers could also choose to use T-Mobile.
"It was thin. Dare I say as if not a bit thinner than iPhone," he wrote. The phone used an on-screen keyboard instead of a hardware keyboard. He said Google was expected to reveal more details in the next few days.