The past few years have seen a significant improvement in the efficiency of organometal halide‐perovskite‐based light‐emitting diodes (PeLEDs). However, poor operation stability of the devices still hinders the commercialization of this technology for practical applications. Despite extensive studies on the degradation mechanisms of perovskite thin films, it remains unclear where and how degradation occurs in a PeLED. Electroabsorption (EA) spectroscopy is applied to study the degradation process of PeLEDs during operation and directly evaluates the stability of each functional layer (i.e., charge transporting layers and light‐emitting layer) by monitoring their unique optical signatures. The EA measurements unambiguously reveal that the degradation of the PeLEDs occurs predominantly in the perovskite layer. With finite‐element method‐based device modeling, it is further revealed that the degradation may initiate from the interface between the perovskite and hole transporting layers and that vacancy, antisite, or interstitial defects can further accelerate this degradation. Inspired by these observations, a surface‐treatment step is introduced to passivate the perovskite surface with phenethylammonium iodide. The passivation leads to a drastic enhancement of the PeLED stability, with the operation lifetime increased from 1.5 to 11.3 h under a current density of 100 mA cm−2.