Abstract: spherical oscillation of an acoustically levitated gas bubble in water was simulated numerically to elucidate the phenomenon of single-bubble sonoluminescence (SBSL). A refined hydro-chemical model was used, which took into account the processes of water vapor evaporation and condensation, mass diffusion, and chemical reactions. The numerical results show significant water vapor dissociations but rather low degrees of ionizations. A widely accepted weakly ionized gas model is then used to compute the light emission. Contrary to earlier predictions without chemical reactions, the present calculated light spectra are generally too small and the pulses are too short to fit to recent experimental results within stable SBSL range. To solve this contradiction, the electrostatic interactions of the ionized gases are included, which are shown to lower the ionization potentials of gas species in the bubble significantly. Keywords: Single-bubble sonoluminescence; electrostatic interactions; lowering of ionization potential.