Flankers can strongly deteriorate performance on a target (crowding). The neural mechanisms of crowding are largely unknown. We have recently shown that the N1 component of the EEG is suppressed during crowding. Because it is difficult to disentangle the neural correlates of target and flanker processing with standard visually evoked potentials, here, we used a frequency-tagging technique to analyze EEG responses separately for flankers and target. Subjects discriminated the offset direction of a vernier that was slowly increasing in size either to the left or right. The vernier and the flankers were either green or red and flickered at two different frequencies. Flankers of the same color as the vernier (green-green or red-red) crowded more strongly than flankers of a different color (green-red or red-green) because the former, as we propose, grouped with the vernier. EEG responses to the vernier were suppressed during crowding (same color flankers) compared to uncrowding (different color flankers). EEG responses to the flankers were slightly larger when the flankers grouped with the target compared to when they ungrouped from the target. Hence, EEG frequency tagging dissociates target and flanker processing. Our results suggest that, in crowding, the target is suppressed when it groups with the flankers while flanker-related activity increases or stays constant.