There is growing interest in combining transcranial magnetic stimulation (TMS) with electroencephalography (EEG). Because TMS pulses are accompanied by a clicking sound, it is very likely that part of the response in the EEG consists of an auditory evoked potential (AEP). Different methods have been applied to mask the sound of TMS. However, it is unclear which masking method is most effective in reducing the AEP. In this study we explore the presumed contribution of the AEP to the response and evaluate different ways to mask the TMS clicking sound. Twelve healthy subjects and one completely deaf subject participated in this study. Eight different masking conditions were evaluated in nine hearing subjects. The amplitude of the N100–P180 complex was compared between the different masking conditions. We were not able to completely suppress the N100–P180 when the coil was placed on top of the head. Using an earmuff or exposing the subjects to white or adapted noise caused a small but significant reduction in N100–P180 amplitude, but the largest reduction was achieved when combining a layer of foam, placed between coil and head, with white or adapted noise. The deaf subject also showed a N100–P180 complex. We conclude that both the TMS clicking sound and cortical activation by the magnetic pulse contribute to the N100–P180 amplitude.