In oil–air lubrication systems, large numbers of air microbubbles are often included in the oil phase. However, the principles of microbubble formation in oil–air annular flow and their influencing factors remain uncertain, and previous conclusions regarding the effects of microbubbles on the viscosity properties of the lubricant oil are inconsistent. Thus, there is an urgent need for experimental verification. In this paper, a transient force balance model is established and used to ascertain the formation of air microbubbles in oil (AB-oil) for an oil–air annular flow. The stability of these microbubbles is analyzed using the Rayleigh–Plesset equation. Theoretical analysis shows that the microbubble radius is the key factor affecting the force balance and stability of microbubbles in oil. Experiments are conducted based on this theoretical analysis, and the void fraction of AB-oil is determined through image analysis to verify the principles and influencing factors of AB-oil formation in oil–air lubrication systems. The viscosity properties of AB-oil are then tested using a rheometer. The experimental results indicate that the formation of AB-oil is affected by oil viscosity, pipe range, oil feeding rate, and air pressure. AB-oil exhibit different viscosity properties at different shear rates and void fractions. Finally, the relationship between the void fraction and viscosity at different shear rates is determined from the experimental data. The outcomes of this research provide insights into the characteristics of oil–air lubrication systems for high-speed machine tool spindles.