A strong laser pulse that is focused into a liquid produces a vapor cavity, which first expands and then collapses with subsequent rebounds. In this paper a mathematical model of the spherically symmetric motion of a laser-induced bubble is proposed. It describes gas and liquid dynamics including compressibility, heat, and mass transfer effects and nonequilibrium processes of evaporation and condensation on the bubble wall. It accounts also for the occurrence of supercritical conditions at collapse. Numerical investigations of the collapse and first rebound have been carried out for different bubble sizes. The results show a fairly good agreement with experimental measurements of the bubble radius evolution and the intensity of the outgoing shock wave emitted at collapse. Calculations with a small amount of noncondensable gas inside the bubble show its strong influence on the dynamics.