In this paper, we establish a sharp concentration-compactness principle associated with the singular Adams inequality on the second-order Sobolev spaces in
{\mathbb{R}^{4}}
. We also give a new Sobolev compact embedding which states
{W^{2,2}(\mathbb{R}^{4})}
is compactly embedded into
{L^{p}(\mathbb{R}^{4},|x|^{-\beta}\,dx)}
for
{p\geq 2}
and
{0<\beta<4}
. As applications, we establish the existence
of ground state solutions to the following bi-Laplacian equation with critical nonlinearity:
\displaystyle\Delta^{2}u+V(x)u=\frac{f(x,u)}{|x|^{\beta}}\quad\mbox{in }%
\mathbb{R}^{4},
where
{V(x)}
has a positive lower bound and
{f(x,t)}
behaves like
{\exp(\alpha|t|^{2})}
as
{t\to+\infty}
. In the case
{\beta=0}
, because of the loss of Sobolev compact embedding, we use the principle
of symmetric criticality to obtain the existence of ground state solutions by assuming
{f(x,t)}
and
{V(x)}
are radial with respect to x and
{f(x,t)=o(t)}
as
{t\rightarrow 0}
.