The neural mechanisms of rule learning are of interest to cognitive neuroscientists, but the time course of rule induction and the related brain potential remain unclear. In this study, event‐related brain potentials (ERPs) were measured during the distinct phases of rule induction. Participants in two experiments were presented with a series of Arabic numbers and were asked to detect the hidden rules. The ERP results revealed that (a) the rule‐discovery trials elicited a larger P3 component than the nondiscovery trials, reflecting the initial identification of the regularity of number series, and (b) when a new instance was incongruent with the previously acquired rule, a larger N2 and enhanced late positive component were elicited, reflecting the process of mismatch detection and the updating of working memory context.