Grasping (electronic) structure changes during photochromic processes is crucial for fully understanding the photochromic effect in rare-earth oxyhydride films. In this study, we employ in situ UV illumination positron annihilation lifetime spectroscopy (PALS) to investigate the time evolution of open-volume defects and metallic domains during photodarkening and bleaching in yttrium oxyhydride films. The PALS depth profiles before and after a photodarkening-bleaching cycle reveal a light-induced increase in open-volume defects, that occurs homogeneously throughout the oxyhydride layer. The time-dependent PALS measurements show that upon photodarkening, a fast initial formation of metallic domains occurs, as well as a fast release of loosely bounded hydrogen from vacancy clusters and nanopores. During further photodarkening, the concentration of divacancy-like defects gradually increases due to the aggregation of light-induced hydrogen vacancies with preexisting yttrium monovacancies. After the UV illumination is stopped, two subsequent bleaching phases are observed. During the first bleaching phase, a strong correlation between the shortest positron lifetime 𝜏1 and the photochromic contrast is seen in both samples, suggesting that metallic domains disappear and, correspondingly, positron trapping at yttrium monovacancies and divacancy-like defects increases. During the second bleaching phase, a subsequent correlation between 𝜏1 and the photochromic contrast is observed in the more H-rich sample, which is related to the disappearance of larger metallic domains. After bleaching, most of the metallic domains and the photoexcited electrons in the matrix have disappeared, while the formed small vacancy complexes and larger vacancies remain stable. Our PALS study suggests that the formation of metallic domains is the cause of photodarkening, and the formed vacancy defects are important for understanding the memory effect.