It is generally accepted that the presence of bubbles severely degrades the electric strength of liquid dielectrics, but the influencing factors and mechanisms have yet to be elucidated. Dynamic behavior, partial discharges (PDs) inside bubbles, and their effects on the breakdown of transformer oil are investigated experimentally and theoretically in this study. The results show that, under a nonuniform electric field, the presence of bubbles does not significantly affect the PD inception voltage (PDIV) and breakdown voltage (BV) of the liquid, as bubbles migrate to the region with lower field strength under dielectrophoretic force. In a uniform electric field, conversely, bubbles greatly reduce PDIV and BV; an increase in the number of bubbles or a slower voltage rise rate appears to exacerbate this effect. The PDIV observed in the experiment is much higher than the theoretical value calculated by the Townsend theory or streamer criterion, which may be due to the lack of free electrons inside the bubble, thus resulting in scarce internal discharge. The addition of X-rays enhances the radiation ionization and then eliminates the inconsistency between the theoretical and measured values of PDIV, which supports our hypothesis. The bubble-triggered breakdown of liquid dielectrics, namely, once a discharge occurs inside the bubble, likely triggering the breakdown of the liquid gap, is observed. The electric field enhancement caused by surface charges and the instability of the gas–liquid interface may account for this.