Abstract The ignition of plasmas in liquids has applications from medical instrumentation to manipulation of liquid chemistry. Formation of plasmas directly in a liquid often requires prohibitively large voltages to initiate breakdown. Producing plasma streamers in bubbles submerged in a liquid with higher permittivity can significantly lower the voltage needed to initiate a discharge by reducing the electric field required to produce breakdown. The proximity of the bubble to the electrodes and the shape of the bubbles play critical roles in the manner in which the plasma is produced in, and propagates through, the bubble. In this paper, we discuss results from a three-dimensional direct numerical simulation (DNS) used to investigate the shapes of bubbles formed by injection of air into water. Comparisons are made to results from a companion experiment. A two-dimensional plasma hydrodynamics model was then used to capture the plasma streamer propagation in the bubble using a static bubble geometry generated by the DNS The simulations showed two different modes for streamer formation depending on the bubble shape. In an elliptical bubble, a short electron avalanche triggered a surface ionization wave (SIWs) resulting in plasma propagating along the surface of the bubble. In a circular bubble, an electron avalanche first traveled through the middle of the bubble before two SIWs began to propagate from the point closest to the grounded electrode where a volumetric streamer intersected the surface. In an elliptical bubble approaching a powered electrode in a pin-to-pin configuration, we experimentally observed streamer behavior that qualitatively corresponds with computational results. Optical emission captured over the lifetime of the streamer curve along the path of deformed bubbles, suggesting propagation of the streamer along the liquid/gas boundary interface. Plasma generation supported by the local field enhancement of the deformed bubble surface boundaries is a mechanism that is likely responsible for initiating streamer formation.