We present an optical spectroscopy study on the role of oxygen and water in electron trapping and storage/bias-stress degradation of n-type polymer field-effect transistors based on one of the most widely studied electron transporting conjugated polymers, poly{[N,N9-bis(2-octyldodecy1)-naphthalene-1,4,5,8-bis(dicarboximide)-2,6-diyl]-alt-5,59-(2,29-bisthiophene)} (P(NDI2OD-T2)). We combine results obtained from charge accumulation spectroscopy, which allow optical quantification of the concentration of mobile and trapped charges in the polymer film, with electrical characterization of P(NDI2OD-T2) organic field-effect transistors to study the mechanism for storage and bias-stress degradation upon exposure to dry air/oxygen and humid nitrogen/water environments, thus separating the effect of the two molecules and determining the nature of their interaction with the polymer. We find that the stability upon oxygen exposure is limited by an interaction between the neutral polymer and molecular oxygen leading to a reduction in electron mobility in the bulk of the semiconductor. We use density functional theory quantum chemical calculations to ascribe the drop in mobility to the formation of a shallow, localized, oxygen-induced trap level, 0.34 eV below the delocalized lowest unoccupied molecular orbital of P(NDI2OD-T2). In contrast, the stability of the polymer anion against water is limited by two competing reactions, one involving the electrochemical oxidation of the polymer anion by water without degradation of the polymer and the other involving a radical anion-catalyzed chemical reaction of the polymer with water, in which the electron can be recycled and lead to further degradation reactions, such that a significant portion of the film is degraded after prolonged bias stressing. Using Raman spectroscopy, we have been able to ascribe this to a chemical interaction of water with the naphthalene diimide unit of the polymer. The degradation mechanisms identified here should be considered to explain electron trapping in other rylene diimides and possibly in other classes of conjugated polymers as well.