In reverberant environments, the brain can suppress echoes so that auditory perception is dominated by the primary or leading sounds. Echo suppression comprises at least two distinct phenomena whose neural bases are unknown: spatial translocation of an echo toward the primary sound, and object capture to combine echo and primary sounds into a single event. In an electroencephalography study, we presented subjects with primary-echo (leading-lagging) click pairs in virtual acoustic space, with interclick delay at the individual's 50% suppression threshold. On each trial, subjects reported both click location (one or both hemifields) and the number of clicks they heard (one or two). Thus, the threshold stimulus led to two common percepts: Suppressed and Not Suppressed. On some trials, a subset of subjects reported an intermediate percept, in which two clicks were perceived in the same hemifield as the leading click, providing a dissociation between spatial translocation and object capture. We conducted time-frequency and event-related potential analyses to examine the time course of the neural mechanisms mediating echo suppression. Enhanced gamma band phase synchronization (peaking at approximately 40 Hz) specific to successful echo suppression was evident from 20 to 60 ms after stimulus onset. N1 latency provided a categorical neural marker of spatial translocation, whereas N1 amplitude still reflected the physical presence of a second (lagging) click. These results provide evidence that (1) echo suppression begins early, at the latest when the acoustic signal first reaches cortex, and (2) the brain spatially translocates a perceived echo before the primary sound captures it.