In OSX Lion, Terminal now defaults new tabs to open in the same working directory you were just in. That's nice, but your .rvmrc file will not get executed. That's because RVM only executes it when you `cd` into that directory, and opening a new session in that directory doesn't count. Here's a fix. Add this to your ~/.bash_profile or whatever you use: cd . Whenever you open a new terminal session, this will automatically cd into the current directory, triggering RVM to execute the .rvmrc. This seems like a quick and dirty trick, so if anybody knows a better way, please comment.