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We investigated the temporospatial dynamics of the power of the phase-linked component and the total power of EEG alpha oscillations on presentation of an illusory outline (Kanizsa square) and a control nonillusory image to 16 healthy adult subjects. Alpha oscillations were identified using wavelets; statistical assessments of the dynamics of alpha power were studied by analysis of variance, along with a new nonparametric multifactorial analysis method. Presentation of visual stimuli was found to be accompanied by early increases in the total power of alpha oscillations, which were more marked on perception of the illusory outline as compared with the control stimulus (the “illusion effect”). This early short phase of the alpha response arose mainly because of the phase-linked component, and was followed by a longer-lasting phase of depression of the total power of alpha oscillations (“alpha rhythm blockade”), which was nonspecific in relation to the type of stimulus. Both phases of the alpha response were most marked in the parietal-temporal-occipital areas of the right hemisphere. We propose that the first increase in alpha oscillations reflects modulation of the activity of neuron ensembles involved in processing the overall patterns, while alpha rhythm blockade is associated with orientation processes.