The formation, growth, and stability of oxygen bubbles inside the porous transport layer (PTL) pores of the anode of a polymer electrolyte membrane water electrolysis (PEMWE) cell was investigated by 1-dimensional mathematical modeling inside the PTL and into the flow channel. The effect of oxygen bubbles on the electrolysis overpotential has been evaluated, and the results were used to predict the effects of catalyst and PTL structures on the electrolysis cell performance. The results show how surface oxygen bubbles block active catalyst sites and decrease the electrochemically active surface area (ECSA). The effects of catalyst layer wettability, PTL wettability and pore size, and the operating conditions on the growth and detachment of bubbles from the catalyst surface were modeled. The model accounts for the growth and stability of three types of bubbles in a PEMWE cell: nucleation-driven, drag-driven, and buoyancy-driven bubbles. Nucleation-driven bubbles show the smallest overpotential: 28 mV at the reference operating conditions and PEMWE properties, compared to 35 mV for the drag-driven bubbles and 43 mV for the buoyancy-driven bubbles. Catalyst wettability is found to be the most influential material property concerning bubble overpotential for all three types of bubbles. PTL wettability and the cell pressure are the next most important factors in this regard. The modeling results can be used for improved PTL, catalyst layer, and flow field design for PEMWE cells.