Bubble dynamics with highly nonlinear interactions between an oscillating bubble and gas-liquid interface in the vicinity of a rigid wall with a gas-entrapping hole were numerically investigated in this study. The evolution of a cavitation bubble and its interactions with the gas-liquid interface were simulated using a fully compressible mixture model for three-phase flow. The solver was developed based on a dual-time preconditioning technique coupled with an interface capturing method on a general curvilinear grid. To assess the capability of the solver, validation was done with experimental data on bubble growth and collapse near a flat rigid wall (γ=2.0), and near a rigid wall with a gas-entrapping hole (γ=1.2). Good agreements in comparisons of the bubble shape and equivalent bubble radius were achieved. Numerical simulations of bubble growth and collapse in proximity to a rigid wall with a hole at different standoff distances were then conducted. The examined results showed that the gas entrapped inside the hole has considerable effects on the formation and redirection of the liquid jet, as well as on the dynamics of the cavitation bubble. Unlike the bubble collapse near a flat solid wall, the liquid jet was directed far away from the solid wall with a gas-entrapping hole, and the jet velocity was significantly smaller than that of the flat solid wall. The simulated results also revealed a potential for improving the design and production of body surfaces, which are often damaged by the impact of the liquid jet caused by bubble collapse.