Abstract: We have studied the gamma p -> K-0 Sigma(+) reaction in the energy region around the K*Lambda and K*Sigma thresholds, where the CBELSA/TAPS cross section shows a sudden drop and the differential cross section experiences a transition from a forward-peaked distribution to a flat one. Our coupled-channel model incorporates the dynamics of the vector meson-baryon interaction which is obtained from the hidden gauge formalism. We find that the cross section in this energy region results from a delicate interference between amplitudes having K*Lambda and K*Sigma intermediate states. The sharp downfall is dictated by the presence of a nearby N* resonance produced by our model, a feature that we have employed to predict its properties. We also show results for the complementary gamma n -> K-0 Sigma(0) reaction, the measurement of which would test the mechanism proposed in this work.