The highly nonlinear interaction between an oscillating bubble and the gas–liquid interface of bubble dynamics near a rigid wall with a gas-entrapping hole was numerically studied in this study. The evolution/interactions of the cavitation bubble and/with the gas–liquid interface were simulated based on a fully compressible mixture model of three-phase flow which was developed based on a dual-time preconditioning technique coupled with an interface-sharpening technique with a general curvilinear grid. The growth and collapse of a bubble in proximity to a rigid wall with a hole with different standoff distances were simulated and analyzed. The examined results showed that the gas entrapping inside the hole plays a vital role in the formation and direction of the liquid jet of bubble dynamics. Unlike the bubble collapse near a flat solid wall, the liquid jet was directed far away from the solid wall. The simulated results suggest a potential for improving the design and production of body surfaces, which are often corroded by the impact of the liquid jet caused by bubble collapse.