Behavioral and functional imaging studies have demonstrated that lexical knowledge influences the categorization of perceptually ambiguous speech sounds. However, methodological and inferential constraints have so far been unable to resolve the question of whether this interaction takes the form of direct top-down influences on perceptual processing, or feedforward convergence during a decision process. We examined top-down lexical influences on the categorization of segments in a /s/-/integral/ continuum presented in different lexical contexts to produce a robust Ganong effect. Using integrated MEG/EEG and MRI data we found that, within a network identified by 40 Hz gamma phase locking, activation in the supramarginal gyrus associated with wordform representation influences phonetic processing in the posterior superior temporal gyrus during a period of time associated with lexical processing. This result provides direct evidence that lexical processes influence lower level phonetic perception, and demonstrates the potential value of combining Granger causality analyses and high spatiotemporal resolution multimodal imaging data to explore the functional architecture of cognition.