We examined temporal dynamics of EEG phase-locked alpha oscillations during perception of illusory (Kanizsa square) and non-illusory images in boys with autism and age-matched typically developing boys. In typically developing boys the illusory contour (IC) as compared to the control stimulus provoked an increased alpha response at the parietal scalp areas. This IC effect demonstrated continuity within the time window of 133-267 ms after the stimulus onset. Although boys with autism did not display this effect at the group level, part of the sample showed an atypical two-stage pattern of illusory contour effect. The first early stage of IC effect (50-133 ms) was pronounced at the midline occipital electrode localized in the vicinity of the primary visual cortex. The localization and the early onset time suggest that this early IC effect is related to abnormally enhanced "low-level" locally-oriented processes of contour completion in autism. The second stage of IC effect (267-400 ms) was observed at the left parietal region only, and was delayed comparatively to that in healthy boys, suggesting the deficit of "intermediate" processes of perceptual grouping linked to the higher-order visual areas.