<p>Microbubbles flow electrolytic plasma polishing (MF-EPP) facilitates controllable electrolytic plasma polishing (EPP) using a low-power supply. A vapor gaseous envelope (VGE) around a workpiece is essential for EPP polishing. Nonetheless, the generation conditions and control parameters of a local gas film on the workpiece surface in MF-EPP are not fully understood. In this study, an analysis of the electrochemical and hydrothermal reactions revealed that the gas composition on the anode surface is mainly composed of water vapor, which is heated by Joule heat, and electrolysis gases such as oxygen, fluorine, hydrogen, and nitrogen. An analysis of the formation conditions and calculation of the volume flux of each gas revealed that vapor is the main component of the gas film. For the vapor characteristics, a bubble nucleation and growth model was established. On this basis, the main factors affecting the nucleation, growth, and coalescence of bubbles were then analyzed, indicating that superheating and heat flow density are the principal factors affecting the aggregation of bubbles and, thus, the formation of a gas film. It was determined that the presence of electrolytic gases has a beneficial influence on the nucleation of vapor bubbles. Additionally, a bubble dynamics model was constructed based on the conservation of energy, and the impact of processing parameters on the evolution of bubbles was analyzed. The threshold for the formation of a stable gas film under these experimental conditions was determined to be a voltage of 350 V and an initial electrolyte temperature of 80 °C. The applicability of the model was validated through experimentation, and the establishment of the model provides theoretical and experimental references for the formulation and optimization of MF-EPP machining process parameters.</p>