In crowding, flanking elements strongly deteriorate performance. For example, vernier offset discrimination is strongly affected by neighboring flankers. Performance is worst when the flankers have the same length as the vernier. Surprisingly, performance improves for longer and shorter flankers [Malania et al., 2007, Journal of Vision, 7(2):1, 1-7]. We proposed that crowding is strongest when the vernier and the flankers group (same length flankers) and weaker when they ungroup (shorter or longer flankers). Here, we used high density EEG to investigate the time course of crowding. First we replicated previous findings. Performance was best in the long flankers condition, intermediate in the short flankers condition, and worst in the medium flankers condition. The P1 wave amplitude correlated with flanker length being highest in the long flankers condition, intermediate in the medium flankers condition, and lowest in the short flankers condition. The N1 wave amplitude correlated well with performance being highest in the long flankers condition, intermediate in the short flankers condition, and lowest in the medium flankers condition. Our study shows that the N1 wave is a good predictor for perceptual grouping and hence crowding. These processes seem to occur after the P1 wave, i.e. after basic feature extraction.