We have investigated the dynamics of freely floating smectic bubbles using high-speed optical imaging. Bubbles in the size range from a few hundred micrometers to several centimeters were prepared from collapsing catenoids. They represent ideal model systems for the study of thin-film fluid dynamics under well-controlled conditions. Owing to the internal smectic layer structure, the bubbles combine features of both soap films and vesicles in their unique shape dynamics. From a strongly elongated initial shape after pinch-off, they relax towards the spherical equilibrium, first by a slow redistribution of the smectic layers, and finally by weak, damped shape oscillations. In addition, we describe the rupture of freely floating smectic bubbles, and the formation and stability of smectic filaments.