It is generally recognised that event related potentials (ERPs) of electroencephalogram (EEG) primarily reflect summed post-synaptic activity of the local pyramidal neural population(s). However, it is still not understood how the positive and negative deflections (e.g. P1, N1 etc) observed in ERP recordings are related to the underlying excitatory and inhibitory post-synaptic activity. We investigated the neurogenesis of P1 and N1 in ERPs by pharmacologically manipulating inhibitory post-synaptic activity in the somatosensory cortex of rodent, and concurrently recording EEG and local field potentials (LFPs). We found that the P1 wave in the ERP and LFP of the supragranular layers is determined solely by the excitatory post-synaptic activity of the local pyramidal neural population, as is the initial segment of the N1 wave across cortical depth. The later part of the N1 wave was modulated by inhibitory post-synaptic activity, with its peak and the pulse width increasing as inhibition was reduced. These findings suggest that the temporal delay of inhibition with respect to excitation observed in intracellular recordings is also reflected in extracellular field potentials (FPs), resulting in a temporal window during which only excitatory post-synaptic activity and leak channel activity are recorded in the ERP and evoked LFP time series. Based on these findings, we provide clarification on the interpretation of P1 and N1 in terms of the excitatory and inhibitory post-synaptic activities of the local pyramidal neural population(s).