Iron hydroxide is found in a wide range of contexts ranging from biominerals to steel corrosion, and it can transform to anhydrous oxide via releasing O2 gas and H2O. However, it is not well understood how gases transport through a crystal lattice. Here, we present in situ observation of the nucleation and migration of gas bubbles in iron (hydr)oxide using transmission electron microscopy. We create Pb-FeOOH model core-shell nanoparticles in a liquid cell. Under electron irradiation, iron hydroxide transforms to iron oxide, during which bubbles are generated, and they migrate through the shell to the nanoparticle surface. Geometric phase analysis of the shell lattice shows an inhomogeneous stain field at the bubbles. Our modeling suggests that the elastic interaction between the core and the bubble provides a driving force for bubble migration.