Use <Image> with a local file

It works exactly as you expect it to work. There's a bug https://github.com/facebook/react-native/issues/282 that prevents it from working correctly.

If you have node_modules (with react_native) in the same folder as the xcode project, you can edit node_modules/react-native/packager/packager.js and make this change: https://github.com/facebook/react-native/pull/286/files . It'll work magically :)

If your react_native is installed somewhere else and the patch doesn't work, comment on https://github.com/facebook/react-native/issues/282 to let them know about your setup.

Using React Native 0.41 (in March 2017), targeting iOS, I just found it as easy as:

<Image source={require('./myimage.png')} />

The image file must exist in the same folder as the .js file requiring it for "./" to work.

I didn't have to change anything in the XCode project. It just worked.

Note that the path seems to have to start with "./" or "../" and be full lower case. I'm not sure what all the restrictions are, but start simple and work forward.

Hope this helps someone, as many other answers here seem overly complex and full of (naughty) off-site links.

UPDATE: BTW - The official documentation for this is here: https://reactnative.dev/docs/images