The following night (the second night of the month), huge bonfires were lit on designated mountaintops. Lookouts stationed on other mountaintops would see that a fire had been lit, and would light their own fires. This chain of communication led all the way to Babylonia, so that even very distant communities knew that the day beforehand had been declared Rosh Chodesh.
Eventually, the Sadducees started lighting fires on the wrong days in order to manipulate the calendar. To prevent this confusion, the fire-on-mountaintop method of communication was discontinued, and instead messengers were dispatched to Babylonia and all other far-flung Jewish settlements. This took a lot longer, a delay which had (and still has) halachic implications with regards to observance of the second day of holidays in the Diaspora. (See Why are holidays celebrated an extra day in the Diaspora?)