rails-3.0.7 depends on ~>arel-2.0.2 which is not compatible with arel-2.1.1 activerecord-3.0.7 build is pulling ~arel-2.1.1 Result will be: $ rails server Could not find gem 'arel (~> 2.0.2)', required by 'rails (= 3.0.7)', in any of the sources Downgrading arel to 2.0.4 is solving the problem.
I've fixed this by slotting arel and let activerecord 3.0.7 depend on the 2.0.x slot. Thanks for the report.