Nested Recycler view height doesn't wrap its content

@user2302510 solution works not as good as you may expected. Full workaround for both orientations and dynamically data changes is:

public class MyLinearLayoutManager extends LinearLayoutManager {

    public MyLinearLayoutManager(Context context, int orientation, boolean reverseLayout)    {
        super(context, orientation, reverseLayout);
    }

    private int[] mMeasuredDimension = new int[2];

    @Override
    public void onMeasure(RecyclerView.Recycler recycler, RecyclerView.State state,
                          int widthSpec, int heightSpec) {
        final int widthMode = View.MeasureSpec.getMode(widthSpec);
        final int heightMode = View.MeasureSpec.getMode(heightSpec);
        final int widthSize = View.MeasureSpec.getSize(widthSpec);
        final int heightSize = View.MeasureSpec.getSize(heightSpec);
        int width = 0;
        int height = 0;
        for (int i = 0; i < getItemCount(); i++) {
            measureScrapChild(recycler, i,
                    View.MeasureSpec.makeMeasureSpec(i, View.MeasureSpec.UNSPECIFIED),
                    View.MeasureSpec.makeMeasureSpec(i, View.MeasureSpec.UNSPECIFIED),
                    mMeasuredDimension);

            if (getOrientation() == HORIZONTAL) {
                width = width + mMeasuredDimension[0];
                if (i == 0) {
                    height = mMeasuredDimension[1];
                }
            } else {
                height = height + mMeasuredDimension[1];
                if (i == 0) {
                    width = mMeasuredDimension[0];
                }
            }
        }
        switch (widthMode) {
            case View.MeasureSpec.EXACTLY:
                width = widthSize;
            case View.MeasureSpec.AT_MOST:
            case View.MeasureSpec.UNSPECIFIED:
        }

        switch (heightMode) {
            case View.MeasureSpec.EXACTLY:
                height = heightSize;
            case View.MeasureSpec.AT_MOST:
            case View.MeasureSpec.UNSPECIFIED:
        }

        setMeasuredDimension(width, height);
    }

    private void measureScrapChild(RecyclerView.Recycler recycler, int position, int widthSpec,
                                   int heightSpec, int[] measuredDimension) {
        View view = recycler.getViewForPosition(position);
        if (view != null) {
            RecyclerView.LayoutParams p = (RecyclerView.LayoutParams) view.getLayoutParams();
            int childWidthSpec = ViewGroup.getChildMeasureSpec(widthSpec,
                    getPaddingLeft() + getPaddingRight(), p.width);
            int childHeightSpec = ViewGroup.getChildMeasureSpec(heightSpec,
                    getPaddingTop() + getPaddingBottom(), p.height);
            view.measure(childWidthSpec, childHeightSpec);
            measuredDimension[0] = view.getMeasuredWidth() + p.leftMargin + p.rightMargin;
            measuredDimension[1] = view.getMeasuredHeight() + p.bottomMargin + p.topMargin;
            recycler.recycleView(view);
        }
    }
}

Update

Many issues relating to this feature in version 23.2.0 have been fixed in 23.2.1, update to that instead.

With the release of Support Library version 23.2, RecyclerView now supports that!

Update build.gradle to:

compile 'com.android.support:recyclerview-v7:23.2.1'

or any version beyond that.

This release brings an exciting new feature to the LayoutManager API: auto-measurement! This allows a RecyclerView to size itself based on the size of its contents. This means that previously unavailable scenarios, such as using WRAP_CONTENT for a dimension of the RecyclerView, are now possible. You’ll find all built in LayoutManagers now support auto-measurement.

This can be disabled via setAutoMeasurementEnabled() if need be. Check in detail here.

The code up above doesn't work well when you need to make your items "wrap_content", because it measures both items height and width with MeasureSpec.UNSPECIFIED. After some troubles I've modified that solution so now items can expand. The only difference is that it provides parents height or width MeasureSpec depends on layout orientation.

public class MyLinearLayoutManager extends LinearLayoutManager {

public MyLinearLayoutManager(Context context, int orientation, boolean reverseLayout)    {
    super(context, orientation, reverseLayout);
}

private int[] mMeasuredDimension = new int[2];

@Override
public void onMeasure(RecyclerView.Recycler recycler, RecyclerView.State state,
                      int widthSpec, int heightSpec) {
    final int widthMode = View.MeasureSpec.getMode(widthSpec);
    final int heightMode = View.MeasureSpec.getMode(heightSpec);
    final int widthSize = View.MeasureSpec.getSize(widthSpec);
    final int heightSize = View.MeasureSpec.getSize(heightSpec);
    int width = 0;
    int height = 0;
    for (int i = 0; i < getItemCount(); i++) {


        if (getOrientation() == HORIZONTAL) {

            measureScrapChild(recycler, i,
                    View.MeasureSpec.makeMeasureSpec(i, View.MeasureSpec.UNSPECIFIED),
                    heightSpec,
                    mMeasuredDimension);

            width = width + mMeasuredDimension[0];
            if (i == 0) {
                height = mMeasuredDimension[1];
            }
        } else {
            measureScrapChild(recycler, i,
                    widthSpec,
                    View.MeasureSpec.makeMeasureSpec(i, View.MeasureSpec.UNSPECIFIED),
                    mMeasuredDimension);
            height = height + mMeasuredDimension[1];
            if (i == 0) {
                width = mMeasuredDimension[0];
            }
        }
    }
    switch (widthMode) {
        case View.MeasureSpec.EXACTLY:
            width = widthSize;
        case View.MeasureSpec.AT_MOST:
        case View.MeasureSpec.UNSPECIFIED:
    }

    switch (heightMode) {
        case View.MeasureSpec.EXACTLY:
            height = heightSize;
        case View.MeasureSpec.AT_MOST:
        case View.MeasureSpec.UNSPECIFIED:
    }

    setMeasuredDimension(width, height);
}

private void measureScrapChild(RecyclerView.Recycler recycler, int position, int widthSpec,
                               int heightSpec, int[] measuredDimension) {
    View view = recycler.getViewForPosition(position);
    recycler.bindViewToPosition(view, position);
    if (view != null) {
        RecyclerView.LayoutParams p = (RecyclerView.LayoutParams) view.getLayoutParams();
        int childWidthSpec = ViewGroup.getChildMeasureSpec(widthSpec,
                getPaddingLeft() + getPaddingRight(), p.width);
        int childHeightSpec = ViewGroup.getChildMeasureSpec(heightSpec,
                getPaddingTop() + getPaddingBottom(), p.height);
        view.measure(childWidthSpec, childHeightSpec);
        measuredDimension[0] = view.getMeasuredWidth() + p.leftMargin + p.rightMargin;
        measuredDimension[1] = view.getMeasuredHeight() + p.bottomMargin + p.topMargin;
        recycler.recycleView(view);
    }
}
}