The dynamics of a bubble in a dilute bubbly water-air mixture is investigated experimentally and the results compared with a simple homogeneous compressible fluid model in order to elucidate the requirements from a better advanced numerical solution. The experiments are conducted in view of providing input and validation for an advanced bubbly flow numerical model we are developing. Corrections for classical approaches where in the two-phase flow modeling the dynamics of individual bubble is based on spherical isolated bubble dynamics in the liquid or an equivalent homogeneous medium are sought. The main/primary bubble is produced by an underwater spark discharge from charged capacitors, while the bubbly medium is generated using electrolysis. The size of the main bubble is controlled by the discharge voltage, the capacitors size, and the ambient pressure in the container. The size and concentration of the fine bubbles is controlled by the electrolysis voltage, the length, diameter, arrangement, and type of the wires, and also by the pressure imposed in the container. This enables parametric study of the factors controlling the dynamics of the primary bubble and development of relationships between the primary bubble characteristic quantities such as achieved maximum bubble radius and bubble period and the characteristics of the surrounding two-phase medium: micro bubble sizes and void fraction. The dynamics of the main bubble and of the mixture is observed using high speed video photography. The void fraction of the bubbly mixture in the fluid domain is deduced from image analysis of the high speed movies and obtained as a function of time and space. The interaction between the primary bubble and the bubbly medium is analyzed using both field pressure measurements and high-speed videography. Parameters such as the primary bubble energy and the bubble mixture density (void fraction) are varied, and their effects studied. The experimental data is then compared to a simple compressible fluid medium model which accounts for the change in the medium properties in space and time. This helps illustrate where such simple models are valid and where they need improvements. This information is valuable for the parallel development of an Eulerian-Lagrangian code, which accounts for the dynamics of bubbles in the field and their interaction.