Large amounts of legacy software create a “barrier” for adoption of formal description techniques in the telecommunication industry. To overcome this barrier, algorithms and methods for automated re-engineering of legacy telecommunication software into formal specifications are required. In this paper we present a “dynamic scenario-based” approach to re-engineering of legacy telecommunication software into SDL specifications. Our approach is iterative and is based on 1) dynamically deriving scenarios from the legacy software and 2) automatically synthesizing an SDL model from these scenarios. For the latter purpose we use the Moscow Synthesizer Tool (MOST-SDL) which is capable of synthesizing an SDL-92 model from a set of extended Message Sequence Charts (MSC). The paper provides detailed descriptions of our re-engineering methodology, emphasizing dynamically deriving both conformance and functional scenarios from legacy. A case study is discussed where our dynamic scenario-based methodology was applied to re-engineer a small-sized telecommunications-like software system, called the ToolExchange.