How do I specify local .gem files in my Gemfile?

I have a couple of gem files which I install via gem install xx.gem. Can I tell Bundler to use them? Or do I have to specify the source path?

This isn't strictly an answer to your question about installing .gem packages, but you can specify all kinds of locations on a gem-by-gem basis by editing your Gemfile.

Specifying a :path attribute will install the gem from that path on your local machine.

gem "foreman", path: "/Users/pje/my_foreman_fork"

Alternately, specifying a :git attribute will install the gem from a remote git repository.

gem "foreman", git: "git://github.com/pje/foreman.git"

# ...or at a specific SHA-1 ref
gem "foreman", git: "git://github.com/pje/foreman.git", ref: "bf648a070c"

# ...or branch
gem "foreman", git: "git://github.com/pje/foreman.git", branch: "jruby"

# ...or tag
gem "foreman", git: "git://github.com/pje/foreman.git", tag: "v0.45.0"

(As @JHurrah mentioned in his comment.)

Seems bundler can't use .gem files out of the box. Pointing the :path to a directory containing .gem files doesn't work. Some people suggested to setup a local gem server (geminabox, stickler) for that purpose.

However, what I found to be much simpler is to use a local gem "server" from file system: Just put your .gem files in a local directory, then use "gem generate_index" to make it a Gem repository

mkdir repo
mkdir repo/gems
cp *.gem repo/gems
cd repo
gem generate_index

Finally point bundler to this location by adding the following line to your Gemfile

source "file://path/to/repo"

If you update the gems in the repository, make sure to regenerate the index.