Observations of cavitation damage within a lubricated expander system are studied experimentally. Typical experimental analysis is used to observe cavitation erosion features such as SEM, light-microscopy and lightinterferometer. An experimental test-rig is used to study bubble characteristics within fluids to compare the theoretical analysis and practical in-service results from the expander system. Using an ultra-sonic methodology and high-speed camera techniques the bubbles are observed within the working fluids. A 2D numerical simulation of the scroll was performed to explore the mechanism which generates scroll cavitation. It is found that the pressure is high enough to liquefy instantaneously part of the refrigerant close to the bottom boundary, creating conditions for the generation of cavitation bubbles within the liquefied refrigerant. This finding resolves the puzzle how the refrigerant which enters the scroll in gas phase produces cavitation.