Spot heating of a 'wet' laminated composite plate produces a bulge shaped delamination, categorized as 'popcorn' delamination. It is created by internal pressure due to nascent steam pockets generated by the intense heat. In this paper, the mechanism of crack propagation from a 'penny shaped' bulge to broad delamination is analyzed. Finite element modeling, based on the condition that the crack propagation occurs by Mode I delamination, is utilized to obtain the ratio of stress intensity factor to internal pressure as a function of the growing crack radius. This is then used to evaluate the critical pressure that triggers crack propagation. Assuming that the bulge is shaped like a spherical cap, the volume and the internal pressure can be estimated for any particular delamination crack radius. Finally, the critical moisture content required to generate a 'popcorn' bulge can be calculated as a function of the diameter of an initial 'penny shaped' crack. If the equilibrium moisture content of epoxy composite materials during service exceeds this value, the 'popcorning' mode of failure may occur with non-uniform heating.