During transparent motion, attention to changes in the direction of one illusory surface will impede recognition of a similar event affecting the other surface if both are close together in time. This is a form of object-based attentional blink (AB). Here, we show that this AB is related to a smaller N200 response to the change in direction and that the response is even smaller for trials on which the subject makes mistakes compared to those with correct responses consistent with signal detection theory models. The variation of N200 associated with the AB can be modeled by an attenuation of current sources estimated in visual extrastriate cortex. These results suggest that the AB in the transparent motion paradigm is due to the suppression of sensory signals in early visual areas.