When a liquid drop impacts a solid surface, air is generally entrapped underneath. Using ultrafast x-ray phase-contrast imaging, we directly visualized the profile of an entrapped air film and its evolution into a bubble during drop impact. We identified a complicated evolution process that consists of three stages: inertial retraction of the air film, contraction of the top air surface into a bubble, and pinch-off of a daughter droplet inside the bubble. Energy transfer during retraction drives the contraction and pinch-off of a daughter droplet. The wettability of the solid surface affects the detachment of the bubble, suggesting a method for bubble elimination in many drop-impact applications.