Yes your computer has to be on. It can be in a sleep state or hibernate but you cant completely turn it off, the phone wont work. I use to have Vonage which basically works the same way as magic jack, you need the internet in order for it to work. Also if your in the process of restarting your computer, which shuts down the MJ, it wont work either and MJ will have to reload but once your on, your golden. ... View related article.