This work aims to investigate the mechanisms governing H2 jet flame evolution and stabilisation by precisely controlling the jet ignition location using a laser-induced plasma in compression-ignition engine-relevant conditions. The experiments examine the flame evolution with high-speed schlieren imaging and pressure trace measurements in an optically-accessible constant-volume combustion chamber over a range of ambient O2 concentration (10–21 vol%) and temperature (600–800 K) conditions. Optical results reveal that in most cases, a localised flame kernel forms at the time and location of the laser-induced plasma and grows in connected regions to engulf the entire upstream and downstream jet volume of the ignition spot. The images also reveal that the flame lift-off is sensitive to ambient O2 and temperature changes. The flame appears attached to the nozzle at 21 vol% O2, but becomes lifted at a lower ambient O2 concentration and a colder temperature. A simplified numerical analysis suggests that edge-flame deflagration into stratified premixed fuel-ambient reactant streams explains the lift-off response to ambient O2 and temperature changes. Furthermore, at the lowest tested O2 concentration, the flame stabilisation occurs in leaner mixtures at the jet peripheral where it is likely exposed to stronger turbulence-chemistry interactions.