Our study focuses on the role of phonology in visual word processing recognition which is a crucial theoretical issue in the psycholinguistics research of reading. We use the ERP method in the homophone-error paradigm and show that both homophone errors and orthographic neighbours of the target word provoke N400 effect and homophony does not facilitate processing. It gives evidence for dual-route model of processing showing that meaning can be activated directly from visual (orthographic) representations and not via phonological codes. At the same time we report P600 effect for homophone errors which can be explained by further competition between phonological and visual representation of the word: it makes homophone errors more costly in the semantic integration of the phrase.