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Rails 3 comes with baked in support with bundler.

Using Bundler with Rails 3

Install Rails as you normally would. Use sudo if you would normally use sudo to install gems.

$ gem install rails

We recommend using rvm for dependable Ruby installations, especially if you are switching between different versions of Ruby

Generate a Rails app as usual

$ rails new myapp
$ cd myapp

Run the server. Bundler is transparently managing your dependencies!

$ rails server

Add new dependencies to your Gemfile as you need them.

gem 'nokogiri'
gem 'geokit'

If you want a dependency to be loaded only in a certain Rails environment, place it in a group named after that Rails environment

group :test do
  gem 'rspec'
  gem 'faker'

You can place a dependency in multiple groups at once as well

group :development, :test do
  gem 'wirble'
  gem 'ruby-debug'

Learn More: Groups

After adding a dependency, if it is not yet installed, install it

$ bundle install

This will update all dependencies in your Gemfile to the latest versions that do not conflict with other dependencies