The hydrodynamic behavior of the fluid around a cavitation bubble located above a rigid boundary is investigated numerically. The liquid around the cavitation bubble is assumed to be incompressible, inviscid and irrotatational and surface tension is assumed to be negligible. Boundary-integral-equation and finite-difference methods are employed to study the problem. Three cases are investigated: (1) when the Bjerknes force is negligible in comparison with the buoyancy force, (2) when the buoyancy force is negligible in comparison with the Bjerknes force, (3) when the Bjerknes attraction force through the rigid surface and the buoyancy force are comparable. It is shown that during the collapse phase in the third case, an annular liquid jet develops around the bubble, causing it to take the shape of an hour-glass. This phenomenon is called necking which is followed by splitting the bubble into two parts. Features to note are the large lateral pressures and the high relative velocities of the fluid particles near the annular liquid jet of the bubble. This large lateral pressure may be the cause of bubble collapse. The velocity field of the liquid domain around the two parts of the cavitation bubble after splitting shows that a stagnation point exists between the two parts of the bubble. Because of the unsteady nature of the problem, the stagnation point and the point of maximum pressure do not coincide.