The problem of spatiotemporal overlap between event-related potential (ERP) components is generally acknowledged in language research. However, its implications for the interpretation of experimental results are often overlooked. In a previous experiment on the functional interpretation of the N400 and P600, it was argued that a P600 effect to implausible words was largely obscured - in one of two implausible conditions - by an overlapping N400 effect of semantic association. In the present ERP study, we show that the P600 effect of implausibility is uncovered when the critical condition is tested against a proper baseline condition which elicits a similar N400 amplitude, while it is obscured when tested against a baseline condition producing an N400 effect. Our findings reveal that component overlap can result in the apparent absence or presence of an effect in the surface signal and should therefore be carefully considered when interpreting ERP patterns. Importantly, we show that, by factoring in the effects of spatiotemporal overlap between the N400 and P600 on the surface signal, which we reveal using rERP analysis, apparent inconsistencies in previous findings are easily reconciled, enabling us to draw unambiguous conclusions about the functional interpretation of the N400 and P600 components. Overall, our results provide compelling evidence that the N400 reflects lexical retrieval processes, while the P600 indexes compositional integration of word meaning into the unfolding utterance interpretation.