Motor inhibitory control is a central executive function, but only recently the importance of perceptual mechanisms for these processes has been focused. It is elusive whether basic mechanisms governing sensory perception affect motor inhibitory control. We examine whether sensory lateral inhibition (LI) processes modulate motor inhibitory control using a system neurophysiological approach combining EEG signal decomposition with source localization methods in a somatosensory GO/NOGO task. The results show that inter-individual variations in the strength of LI effects predominantly affect processes when information needs to be integrated between cerebral hemispheres. If information needs to be integrated between hemispheres, strong sensory suppression will lead to more impulsive errors. Importantly, the neurophysiological data suggest that not purely perceptual or motor processes are affected. Rather, LI affects the response selection level and modulates processes of stimulus categorization. This is associated with activity modulations in the posterior parietal cortex. The results suggest that when sensory suppression is high and when information needs to be integrated across hemispheres, these processes are less efficient, which likely leads to worse motor inhibitory control. The results show how basis principles modulating perceptual processes affect subsequent motor inhibitory control processes.