An echo lagging shortly after a source and arising from another direction perceptually blends with the source, and the location of the fused 'source-echo' is dominated by the source location (the Precedence Effect). The neural substrates underlying the echo localization suppression are ambiguous. We recently suggested an auditory evoked potentials correlate of binaural echo lateralization suppression. A significant and specific reduction in binaural peak amplitude and area of the echo-evoked middle-latency component Pa was observed. The binaural echo-Pa suppression depended on echo lag and correlated with the psychophysical echo lateralization suppression. In this study, the echo-Pa generators were analyzed with 3CLT spatio-temporal analysis, in order to suggest the neural substrates involved in echo lateralization suppression. 3CLT enables reliable identification of components, based on rigid geometrical properties. The results suggest that the Pa1 subcomponent of Pa, associated with primary auditory cortex activity, fully accounts for the echo-Pa suppression. This physiological indication for primary auditory cortex involvement in the precedence effect is the first in humans.