A task set may need to be inhibited to facilitate the switch to another task. This event-related potential (ERP) study determined (1) whether backward inhibition (BI) is exerted preferentially in high interference environments, and (2) whether ERPs locked to critical time points reflect BI during cue preparation and/or response stages. High interference (HI) and low interference (LI) were created by manipulating task difficulty. A reaction time (RT) BI effect (i.e., BI>control trials) was shown only during HI tasks. Cue-locked ERPs on LI tasks suggest increased attentional resources were allocated during the reactivation of a recently inhibited task. For HI tasks, BI versus control trial differences were reflected in a response-locked ERP negativity only after response selection (indexed by the response-locked lateralized readiness potential), indicating that BI is a lateral inhibition mechanism exerted during response preparation.