The operation of digital microfluidic devices with water droplets manipulated by electrowetting is critically dependent on the static and dynamic stability and lubrication properties of the oil films that separate the droplets from the solid surfaces. The factors determining the stability of the films and preventing surface fouling in such systems are not yet thoroughly understood and were experimentally investigated in this study. The experiments were performed using a standard digital microfluidic cartridge in which water droplets enclosed in a thin, oil-filled gap were transported over an array of electrodes. Stable, continuous oil films separated the droplets from the surfaces when the droplets were stationary. During droplet transport, capillary waves formed in the films on the electrode surfaces as the oil menisci receded. The waves evolved into dome-shaped oil lenses. Droplet deformation and oil displacement caused the films at the surface opposite the electrode array to transform into dimples of oil trapped over the centers of the droplets. Lower actuation voltages were associated with slower film thinning and formation of fewer, but larger, oil lenses. Lower ac frequencies induced oscillations in the droplets that caused the films to rupture. Films were also destabilized by addition of surfactants to the oil or droplet phases. Such a comprehensive understanding of the oil film behavior will enable more robust electrowetting-actuated lab-on-a-chip devices through prevention of loss of species from droplets and contamination of surfaces at points where films may break.