This event-related potential (ERP) study examined the impact of phonological variation resulting from a vowel merger on phoneme perception. The perception of the /e/-/epsilon/ contrast which does not exist in Southern French-speaking regions, and which is in the process of merging in Northern French-speaking regions, was compared to the /ø/-/y/ contrast, which is stable in all French-speaking regions. French-speaking participants from Switzerland for whom the /e/-/epsilon/ contrast is preserved, but who are exposed to different regional variants, had to perform a same-different task. They first heard four phonemically identical but acoustically different syllables (e.g., /be/-/be/-/be/-/be/), and then heard the test syllable which was either phonemically identical to (/be/) or phonemically different from (/bepsilon/) the preceding context stimuli. The results showed that the unstable /e/-/epsilon/ contrast only induced a mismatch negativity (MMN), whereas the /ø/-/y/ contrast elicited both a MMN and electrophysiological differences on the P200. These findings were in line with the behavioral results in which responses were slower and more error-prone in the /e/-/epsilon/ deviant condition than in the /ø/-/y/ deviant condition. Together these findings suggest that the regional variability in the speech input to which listeners are exposed affects the perception of speech sounds in their own accent.