The after-effects of nocturnal traffic noise on cognitive performance and inhibitory brain activity were investigated. Twenty participants (18–30 years) performed an easy and a difficult visual Go/Nogo task with simultaneous EEG recording after a quiet night and then during three nights when aircraft noise was presented with equivalent noise levels of 39, 44, and 50 dBA, respectively, between 11 p.m. to 7 a.m. Based on subjective sleep quality rating, participants were separated into “good” versus “bad” sleepers. The performance and inhibition-related components (N2, P3) of event-related potentials were analysed. The N2 and P3 amplitudes were smaller and latencies were prolonged in the difficult than in the easy task. This effect was more pronounced for Nogo than for Go trials. The Nogo-P3 amplitude was smaller in Noise than in “Quiet” conditions in the difficult task only. In the difficult task, the Nogo-P3 latency was prolonged in bad sleepers than in good sleepers. The Nogo-P3 amplitude was reduced in Noise as compared to “Quiet” conditions in bad sleepers only. Sleep quality in bad sleepers worsened steadily with increasing noise levels. No effects of noise or subjective sleep quality on performance were found. Inhibitory processes appear to be selectively impaired after nocturnal noise exposure. The task difficulty and perceived sleep quality are important factors modulating noise effects. The results suggest that nocturnal traffic noise increase physiological costs for inhibitory functioning on the day even if no overt performance decrement is observed.