By a Monte Carlo simulation of the deposition process and a mean-field theory model of the surface structure, we have successfully reproduced experimental oblique-incidence optical reflectance difference signals from laser molecular beam epitaxy of Nb:SrTiO3 on a SrTiO3 substrate in ambient oxygen. We find that during deposition the concentration of oxygen vacancies close to step edges is larger than that on flat terraces and remains stable. We suggest that oxygen vacancies diffusing on the surface tend to accumulate near step edges due to their slow in-diffusion rate there, and that this in-diffusion dominates the oxidation of as-deposited film.