It has been suggested that differential use of configural processing strategies may underlie racially based recognition deficits (known as the "other-race effect"). By employing a well-known configural manipulation (Thatcherization, i.e., rotating the eyes and mouth by 180°), we aimed to demonstrate, electrophysiologically, that configural processing is used to a greater extent when viewing same-race faces than when viewing other-race faces. Face-related event-related potential (ERP) responses were measured for participants viewing normal and Thatcherized faces of their own race (Caucasian) and of another race (African-American). The P1 and N170 components were modulated to a greater extent by Thatcherization for same-race faces, suggesting that the processing of these faces is, in fact, more reliant on configural information than other-race faces. Thatcherization also affected the P250 component more so for same-race faces independently of orientation. The race-dependent effects of Thatcherization as early as P1 suggest that configural encoding may be occurring much earlier than the well-cited N170.