The electroencephalographic (EEG) correlates of degraded speech perception have been explored in a number of recent studies. However, such investigations have often been inconclusive as to whether observed differences in brain responses between conditions result from different acoustic properties of more or less intelligible stimuli or whether they relate to cognitive processes implicated in comprehending challenging stimuli. In this study we used noise vocoding to spectrally degrade monosyllabic words in order to manipulate their intelligibility. We used spectral rotation to generate incomprehensible control conditions matched in terms of spectral detail. We recorded EEG from 14 volunteers who listened to a series of noise vocoded (NV) and noise-vocoded spectrally-rotated (rNV) words, while they carried out a detection task. We specifically sought components of the EEG response that showed an interaction between spectral rotation and spectral degradation. This reflects those aspects of the brain electrical response that are related to the intelligibility of acoustically degraded monosyllabic words, while controlling for spectral detail. An interaction between spectral complexity and rotation was apparent in both evoked and induced activity. Analyses of event-related potentials showed an interaction effect for a P300-like component at several centro-parietal electrodes. Time-frequency analysis of the EEG signal in the alpha-band revealed a monotonic increase in event-related desynchronization (ERD) for the NV but not the rNV stimuli in the alpha band at a left temporo-central electrode cluster from 420-560 ms reflecting a direct relationship between the strength of alpha-band ERD and intelligibility. By matching NV words with their incomprehensible rNV homologues, we reveal the spatiotemporal pattern of evoked and induced processes involved in degraded speech perception, largely uncontaminated by purely acoustic effects.