RxAndroid and Retrofit: Unable to create call adapter for io.reactivex.Observable<retrofit2.Response<okhttp3.ResponseBody>>

You are using RxJava1 adapter for Retrofit, replace it with RxJava2 variant:

//compile 'com.squareup.retrofit2:adapter-rxjava:2.1.0'
compile 'com.jakewharton.retrofit:retrofit2-rxjava2-adapter:1.0.0'

UPDATE

Starting with Retrofit version 2.2.0 there is a first-party call adapter for RxJava2:

compile 'com.squareup.retrofit2:retrofit:2.2.0'
compile 'com.squareup.retrofit2:adapter-rxjava2:2.2.0'

Update : May/2020

New adapter for RxJava 3

implementation 'io.reactivex.rxjava3:rxandroid:3.0.0'
implementation 'io.reactivex.rxjava3:rxjava:3.0.0'
implementation 'com.squareup.retrofit2:adapter-rxjava3:2.9.0'

RxJava3CallAdapterFactory.create() instead of RxJava2CallAdapterFactory.create()

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Update : June/2019

Rxjava version is updated to 2.2.10

compile 'io.reactivex.rxjava2:rxandroid:2.1.1'
compile 'io.reactivex.rxjava2:rxjava:2.2.10'
compile 'com.squareup.retrofit2:retrofit:2.6.0'
compile 'com.squareup.retrofit2:adapter-rxjava2:2.6.0'

Also Retrofit requires at minimum Java 7 or Android 2.3

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For new comers (July/2017) :

You messed your library version for sure.

I have been using latest version of RXAndroid 2.0.1

compile 'io.reactivex.rxjava2:rxandroid:2.0.1'
compile 'io.reactivex.rxjava2:rxjava:2.1.0'
compile 'com.squareup.retrofit2:retrofit:2.3.0'
compile 'com.squareup.retrofit2:adapter-rxjava2:2.3.0'

1) Make sure you have same Retrofit and Retrofit-RxJava Adapters.

2) Use compile

compile 'com.squareup.retrofit2:adapter-rxjava2:2.3.0' 

not

compile 'com.squareup.retrofit2:adapter-rxjava:2.3.0'

and use RxJava2CallAdapterFactory.create() instead of RxJavaCallAdapterFactory.create() while building retrofit.