The town itself is made entirely of bubbles. In fact, it is a bubble equivalent to Bikini Bottom. There is an entire transportation system including bus systems. There are also cars, however, the town's population mostly goes to work by floating through the air.
Bubbletown features many facilities, some of which are parodies of their Bikini Bottom counterparts, which include but are not limited to:
It first appears in the beginning of the episode, where Bubble Buddy is narrating the many features and places of Bubbletown. SpongeBob expresses enthusiasm at the many sights of the town. He then inadvertently wreaks chaos by slipping on a woman's bubble puppies, not only killing them, but also destroying the rest of the town in the process. As a result, SpongeBob is sent to Bubbletown Prison. While arrested, he receives a phone call from Mr. Krabs, who agrees to free him from prison.
While doing so, Mr. Krabs fights off the many bubble security guards and eventually destroys the entire prison and the rest of Bubbletown as well. However, with the help of a giant bottle of bubbles, SpongeBob helps rebuild Bubbletown from the start.
At the end of the episode, Mr. Krabs works at the newly built Bubbly Krab while the real Krusty Krab lacks business. He does so as a quick solution to making money.