A method and apparatus is disclosed for successively forming foam filled bags or cushions of the type wherein a foamable composition is deposited in a plastic bag. The formed bags are adapted to be placed in containers with articles being packaged, and so that when the foam expands, the bags and resulting foam are conformed to the configuration of the articles. The method and apparatus includes advancing a pair of plastic webs through the nip of a pair of drive rollers, while heat sealing the opposing longitudinal side edges of the webs together. Periodically, a predetermined amount of the foamable composition is deposited between the advancing webs immediately above the nip, and the heat sealing along the side edges is periodically and momentarily interrupted to form side edge openings for the subsequent escapement of gases generated during foaming. The advance of the webs is momentarily terminated, and a heated wire then engages the webs to sever the formed bag, while forming a sealed top edge of the formed bag and a sealed bottom edge for the next succeeding bag. The advance then again commences, and the cycle is repeated to successively form the foam filled bags.