We report on a fluorescence microscopy study of the monolayer collapse and shedding behavior due to shell compression during the dissolution of air-filled, lipid-coated microbubbles in degassed media. The monolayer shell was comprised of saturated diacyl phosphatidylcholine (C12:0 to C22:0) and an emulsifier, poly(ethylene glycol)-40 stearate. The morphologies of monolayer collapse structures and shed particles were monitored as a function of phospholipid acyl chain length (n) and temperature. The two components formed a single miscible phase when the phospholipid was near or above its main phase transition temperature, and collapse occurred via suboptical particles to vesicles (both were shed) and tubes as chain length increased. Conversely, two-phase coexistence was observed when the lipid was below its main phase transition temperature. For these bubbles, a transition from primary collapse to secondary collapse was observed. Primary collapse was observed as a loss of expanded phase due to vesiculation. Secondary collapse involved the rapid propagation of monolayer folds and simultaneous deformation. For very rigid monolayers, we observed substantial surface buckling with simultaneous nucleation and growth of folds. The folds merged at a single point or region, providing a conduit for the entire excess lipid to shed in a single event, and the bubble smoothed and became more spherical. These results are discussed in the context of general binary phospholipid collapse behavior, microbubble dissolution behavior, medical applications, and the dissolution behavior of natural microbubbles.