PG::ConnectionBad: fe_sendauth: no password supplied

localhost as a host refers to a TCP connection, which means the auth method is md5 (password required) per your pg_hba.conf:

# IPv4 local connections:host    all             all             127.0.0.1/32            md5# IPv6 local connections:host    all             all             ::1/128                 md5

For the peer method to be taken, you'd need to connect through Unix domain sockets, and since you seem to be using a debian-like OS, that means putting /var/run/postgresql in the host field, or nothing at all (it's the default unless environment variables say otherwise).

EDIT: if using database URIs (supported since Rails-4.1, as announced inhttp://weblog.rubyonrails.org/2014/4/8/Rails-4-1/), the syntax could be:

• for localhost:
  test: "postgresql://localhost/myapp_test"

• for the default Unix socket domain (host field left empty):
  test: "postgresql:///myapp_test"

Change the code as below and it will work

pg_hba.conf:# IPv4 local connections:host    all             all             127.0.0.1/32            trust# IPv6 local connections:host    all             all             ::1/128                 trust

Below its explanation:

trust

Allow the connection unconditionally. This method allows anyone that can connect to the PostgreSQL database server to login as any PostgreSQL user they wish, without the need for a password or any other authentication.

md5

Require the client to supply a double-MD5-hashed password for authentication.

refer for more here

If your hb_conf has already been modified to force passwords, then make sure your rails app's database configuration includes a password in both development and test environments.

default: &default  adapter: postgresql  encoding: unicode  pool: 5  host: localhost  username: your_user  password: your_passworddevelopment:  <<: *default  database: your_db_developmenttest:  <<: *default  database: your_db_testproduction:  url: <%= ENV['DATABASE_URL'] %>

I was getting this error when I failed to supply a password for the test database.