Solution-processed organometallic perovskite solar cells have emerged as one of the most promising thin-film photovoltaic technology. However, a key challenge is their lack of stability over prolonged solar irradiation. Few studies have investigated the effect of light soaking on hybrid perovskites and have attributed the degradation in the optoelectronic properties to photochemical or field-assisted ion migration. Here we show that the slow photocurrent degradation in thin-film photovoltaic devices is due to the formation of light-activated meta-stable deep-level trap states. However, the devices can self-heal completely by resting them in the dark for <1 min or the degradation can be completely prevented by operating the devices at 0 °C. We investigate several physical mechanisms to explain the microscopic origin for the formation of these trap states, among which the creation of small polaronic states involving localized cooperative lattice strain and molecular orientations emerges as a credible microscopic mechanism requiring further detailed studies.