Early electroencephalographic studies that focused on finding brain correlates of psychic events led to the discovery of the P300. Since then, the P300 has become the focus of many basic and clinical neuroscience studies. However, despite its wide applications, the underlying function of the P300 is not yet clearly understood. One line of research among the many studies that have attempted to elucidate the underlying subroutine of the P300 in the brain has suggested that the physiological function of the P300 is related to inhibition. While some intracranial, behavioral, and event-related potential studies have provided support for this theory, little is known about the inhibitory mechanism. In this study, using alpha event-related desynchronization (ERD) and effective connectivity, based on the causal (one-way directed) relationship between alpha ERD and P300 sources, we demonstrated that P300's associated inhibition is implemented at a higher information processing stage in a localized brain region. We discuss how inhibition as the primary function of the P300 is not inconsistent with 'resource allocation' and 'working memory updating' theories about its cognitive function. In light of our findings regarding the scope and information processing stage of inhibition of the P300, we reconcile the inhibitory account of the P300 with working memory updating theory. Finally, based on the compensatory behavior of alpha ERD at the time of suppression of the P300, we propose two distinct yet complementary working memory mechanisms (inhibition and desynchronizing excitation) that render target perception possible.