The impact of oxygen evolution and bubble formation on the performance of an all-vanadium redox flow battery is investigated using a two-dimensional, non-isothermal model. The model is based on mass, charge, energy and momentum conservation, together with a kinetic model for the redox and gas-evolving reactions. The multi-phase mixture model is used to describe the transport of oxygen in the form of gas bubbles. Numerical simulations are compared to experimental data, demonstrating good agreement. Parametric studies are performed to investigate the effects of changes in the operating temperature, electrolyte flow rate and bubble diameter on the extent of oxygen evolution. Increasing the electrolyte flow rate is found to reduce the volume of the oxygen gas evolved in the positive electrode. A larger bubble diameter is demonstrated to increase the buoyancy force exerted on the bubbles, leading to a faster slip velocity and a lower gas volume fraction. Substantial changes are observed over the range of reported bubble diameters. Increasing the operating temperature was found to increase the gas volume as a result of the enhanced rate of O2 evolution. The charge efficiency of the cell drops markedly as a consequence.