Recently organic-inorganic halide perovskite solar cells with rapid progress in power conversion efficiencies have emerged as a potentially low cost photovoltaic technology. However, the instability of perovskite solar cells is still a major hurdle for the technology to be commercially viable. In this work, we study the electric field induced response of laterally structured Au/FTO/CH₃NH₃PbI₃/FTO/Au samples to simulate the behaviors of CH₃NH₃PbI₃ layer in solar cells under operating condition where a voltage bias is present. The samples are characterized by photoluminescence (PL) optical microscopy and scanning electron microscopy (SEM) under different electric field and humidity conditions. It is found that when the applied field is larger than a nominal value, which is dependent on the ambient humidity condition, permanent PL quenching and morphology change are observed near the electrodes where voltage is applied. This irreversible response is a result of perovskite decomposition, evident from the appearance of PbI₂ in the PL spectra. This is one of the main causes for perovskite solar cell instability under operation where a voltage bias is present. However, this moisture-assisted voltage-induced decomposition can be minimized by encapsulation which has also been shown in this work. Another finding of this work is the reversible response, under an electric field, which shows up as PL quenching near the anode where the voltage is applied. Negligible morphology change is observed in this case. The PL quenching observed is attributed to negative ion migration and accumulation. The diffusion coefficient of the mobile ion is estimated to be ~2.1×10-11 cm²s^-1 at 0.5 V/μm. The dominated species is ascribed to be iodine ion. We also examine the effects on carrier dynamics caused by the ion migration and accumulation by performing an in-situ time-correlated single photon counting (TCSPC). The accumulation of iodine ions near the anode result in enhanced non-radiative recombination and therefore both PL quenching and a reduction of PL lifetime. We also propose the negative feedback between decomposition and ion migration when an irreversible response occurs. The decomposition accelerates the rate of ion migration and accumulation, which however screen the applied field, slowing down the field-induced decomposition in the perovskite bulk. Our findings provide new insight into instability issues of perovskite under working condition.