Error running Development: Rails 3.x launcher script was found instead of Rails 4.x one.

Error running Development: XXXX: Rails 3.x launcher script was found instead of Rails 4.x one. You need ‘C:/XXXX/bin/rails’ script to launch Rails server. Please update server launcher according to Rails 4.x documentation.

We had an error when upgrading from rails 3.2 to 4.0.0. To resolve it, you need to adapt the project structure by renaming the script directory into bin.

Now you should have /bin/rails and no more error.

If you still have a problem, just create a new rails project and copy the bin folder to your old one that need an upgrade to 4.0.0.

Rails 4.0.0 Release Notes