How to configure Spring without persistence.xml?

MariuszS' answer is good except that the entityManagerFactory method should return EntityManagerFactory. To do that it can be written like this:

@Bean
public EntityManagerFactory entityManagerFactory(DataSource dataSource, JpaVendorAdapter jpaVendorAdapter) {
    LocalContainerEntityManagerFactoryBean lef = new LocalContainerEntityManagerFactoryBean();
    lef.setDataSource(dataSource);
    lef.setJpaVendorAdapter(jpaVendorAdapter);
    lef.setPackagesToScan("hello");
    return lef.object();
}

For future audience: below code worked:

@Bean (name = "entityManagerFactory")
public EntityManagerFactory entityManagerFactory(DataSource dataSource, JpaVendorAdapter jpaVendorAdapter)
{
    LocalContainerEntityManagerFactoryBean lef = new LocalContainerEntityManagerFactoryBean();
    lef.setDataSource(dataSource);
    lef.setJpaVendorAdapter(jpaVendorAdapter);
    lef.setPackagesToScan("*.models*");
    lef.afterPropertiesSet(); // It will initialize EntityManagerFactory object otherwise below will return null
    return lef.getObject();
}

Specify the "packagesToScan" & "persistenceUnitName" properties in the entityManagerFactory bean definition.

<bean id="entityManagerFactory" class="org.springframework.orm.jpa.LocalContainerEntityManagerFactoryBean">
        <property name="dataSource" ref="dataSource" />

        <property name="persistenceUnitName" value="myPersistenceUnit" />
        <property name="packagesToScan" >
            <list>
                <value>org.mypackage.*.model</value>
            </list>
        </property>

        <property name="jpaProperties">
            <props>
                <prop key="hibernate.dialect">${hibernate.dialect}</prop>
                <prop key="hibernate.hbm2ddl.auto">${hibernate.hbm2ddl.auto}</prop>
                <prop key="hibernate.show_sql">${hibernate.show_sql}</prop>
                <prop key="hibernate.format_sql">${hibernate.format_sql}</prop>
            </props>
        </property>
    </bean>

Note that this is for Spring version > 3.1

From Spring Guide Accessing Data with JPA

@Configuration
@EnableJpaRepositories
public class Application {

    @Bean
    public DataSource dataSource() {
        return new EmbeddedDatabaseBuilder().setType(H2).build();
    }

    @Bean
    public LocalContainerEntityManagerFactoryBean entityManagerFactory(DataSource dataSource, JpaVendorAdapter jpaVendorAdapter) {
        LocalContainerEntityManagerFactoryBean lef = new LocalContainerEntityManagerFactoryBean();
        lef.setDataSource(dataSource);
        lef.setJpaVendorAdapter(jpaVendorAdapter);
        lef.setPackagesToScan("hello");
        return lef;
    }

    @Bean
    public JpaVendorAdapter jpaVendorAdapter() {
        HibernateJpaVendorAdapter hibernateJpaVendorAdapter = new HibernateJpaVendorAdapter();
        hibernateJpaVendorAdapter.setShowSql(false);
        hibernateJpaVendorAdapter.setGenerateDdl(true);
        hibernateJpaVendorAdapter.setDatabase(Database.H2);
        return hibernateJpaVendorAdapter;
    }

Spring Boot

With Spring Boot enabled application this is even easier:

Sample application.yaml

spring:
    datasource:
        url: jdbc:h2:mem:test
        username: sa
        password: sa
        driver-class-name: org.h2.Driver
    jpa:
        database: H2
        show-sql: false
        hibernate:
            format_sql: true
            ddl-auto: auto