Abstract: A foam-in-bag packaging system and method of forming the same is provided in which a bag of flexible plastic film material includes superposed panels joined around their peripheral edges to define an enclosed space which is vented to the outside of the bag by venting perforations in the panels, a packet or pouch of barrier material capable of maintaining foam precursor components in a stable, unreacted state for an extended time period is positioned in the enclosed space in the bag adjacent one end thereof and secured from movement therefrom, the packet has first and second compartments therein separated by a first frangible seal extending across the packet and first and second foam precursor components contained respectively in the first and second compartments, the packet has a second frangible seal between one of the compartments and the enclosed space in the bag, the bag being folded along spaced transverse fold lines into a relatively compact form and being folded along a fold line coincident with the fi