Although the word-frequency effect is one of the most established findings in spoken-word recognition, the precise processing locus of this effect is still a topic of debate. In this study, we used event-related potentials (ERPs) to track the time course of the word-frequency effect. In addition, the neighborhood density effect, which is known to reflect mechanisms involved in word identification, was also examined. The ERP data showed a clear frequency effect as early as 350 ms from word onset on the P350, followed by a later effect at word offset on the late N400. A neighborhood density effect was also found at an early stage of spoken-word processing on the PMN, and at word offset on the late N400. Overall, our ERP differences for word frequency suggest that frequency affects the core processes of word identification starting from the initial phase of lexical activation and including target word selection. They thus rule out any interpretation of the word frequency effect that is limited to a purely decisional locus after word identification has been completed.