Steam bubbles often occur in pipelines due to the pipeline structure or operational errors. The water hammer force induced by the steam bubble collapse is a hidden safety concern. This paper experimentally and numerically investigates the conditions for steam bubble formation and collapse. A series of video pictures taken in the laboratory show that steam bubbles form and collapse over several cycles. The pressure history of the steam bubbles is measured in conjunction with the pictures. In the experiment, the liquid column cavitated at the low pressures and then the cavities collapsed due to condensation causing high pressure pulses. The process was also simulated numerically. The results suggest that coolant pipeline design and operation must include procedures to avoid steam bubble formation.