Add mobileprovision file to Xcode

You can always just drag the file onto the Xcode dock icon. This will add it to Xcode's store. When your target has the correct bundle ID and you have the private key, you should be able to select the appropriate profile and signing identity in the Code Signing build settings.

Two steps:

1. First drag it onto iTunes. Dropping a .mobileProvision onto iTunes will install it in ~/Library/MobileDevice/Provisioning Profiles where it is supposed to go.

2. Second double-click on .mobileProvision to add it to the Xcode store.

It doesn't hurt to relaunch Xcode after that.

Open Organizer in Xcode (Window -> Organizer), go to the Devices tab and select Provisioning Profiles in the left drawer. Then use the Refresh button on the bottom right.

Update 2018

From @mikeLspohn comment: Go to Window > Devices then right-click on your device and select Show Provisioning Profiles ... from there you can click on +/- to add or remove profiles -