Using ERPs in a face recognition task, we investigated whether inversion and contrast reversal, which seem to disrupt different aspects of face configuration, differentially affected encoding and memory for faces. Upright, inverted, and negative (contrast-reversed) unknown faces were either immediately repeated (0-lag) or repeated after 1 intervening face (1-lag). The encoding condition (new) consisted of the first presentation of items correctly recognized in the two repeated conditions. 0-lag faces were recognized better and faster than 1-lag faces. Inverted and negative pictures elicited longer reaction times, lower hit rates, and higher false alarm rates than upright faces. ERP analyses revealed that negative and inverted faces affected both early (encoding) and late (recognition) stages of face processing. Early components (N170, VPP) were delayed and enhanced by both inversion and contrast reversal which also affected P1 and P2 components. Amplitudes were higher for inverted faces at frontal and parietal sites from 350 to 600 ms. Priming effects were seen at encoding stages, revealed by shorter latencies and smaller amplitudes of N170 for repeated stimuli, which did not differ depending on face type. Repeated faces yielded more positive amplitudes than new faces from 250 to 450 ms frontally and from 400 to 600 ms parietally. However, ERP differences revealed that the magnitude of this repetition effect was smaller for negative and inverted than upright faces at 0-lag but not at 1-lag condition. Thus, face encoding and recognition processes were affected by inversion and contrast-reversal differently.