Background: Effect of acute moderate exercise on cognition has been studied recently, although there are controversial reports in this context. This is the reason we performed this study, to observe the effect of acute moderate exercise on the cognitive functions of persons having a sedentary lifestyle, by measuring the latencies of event-related potentials N100, P200, N200, and the inter-peak latencies N100-P200, P200-N200, and N200-P300. Materials and Methods: Sixty right-handed participants (34 males, 26 females) of age group 15 – 30 years, having a sedentary lifestyle, were recruited for the study. A baseline recording of event-related potentials was conducted and then they were subjected to acute moderate exercise (60 – 80% of the maximum load of effort during exercise, where 100%=200 - Age), again the recording was carried out using the paired student's ′t′ test, to compare the present values with the initial values. Results: After performing the exercise there was a significant decrease in the latency of wave N1 and P2 of females for both frequent and rare stimuli. A significant decrease in the latency was seen in wave N2 with rare stimulus in both females and males. While, for frequent stimulus a significant decrease was seen only in females. Also the N2-P3 interpeak latency significantly decreased in males, while there was no significant decrease in females. Conclusion: There was a definite role of exercise in enhancing the cognitive functions as evidenced by its effect on the latencies of event-related potentials N100, P200, N200, and interpeak latencies.