In the present paper, the cavitation bubble dynamics model for a single bubble oscillating within a droplet is improved based on the classical Rayleigh–Plesset bubble dynamics equation and the effects of liquid surface tension and viscosity are both considered. In the aspect of the experiment, the collapsing dynamic process of a bubble within a droplet is carried out by building a high-speed photography experimental platform. In addition, the numerical solution of the dynamic equation for the collapse time of the bubble within the droplet is also carried out. The findings are given as follows: (1) The bubble dynamic equation considering liquid surface tension and viscosity of bubble within droplet is proposed. (2) The surface of liquid droplets induced by the bubble motion could be divided into three modes: no splashing, scattered splashing, composite splash consisting of scattered and flaky splash. (3) The bubble interface during the first collapsing stage could be divided into three types: spherical, conical, and fungiform. (4) The numerical solution shows an accurate prediction of the bubble collapse time within the droplet especially under the condition of medium radius ratio.