We present a number of three-dimensional axisymmetric free boundary problems for two immiscible fluids, such as air and water. A level set method is used where the interface is the zero level set of a continuous function while the two fluids are solutions of the incompressible Navier–Stokes equation. We examine the rise and distortion of an initially spherical bubble into cap bubbles and toroidal bubbles. Steady solutions for gas bubbles rising in a liquid are computed, with favourable comparisons to experimental data. We also study the inviscid limit and compare our results with a boundary integral method. The problems of an air bubble bursting at a free surface and a liquid drop hitting a free surface are also computed.