Known Issues

Setup Wizard insists on reinstalling SDK on each startup

A bug in Android Studio 1.0 RC1 causes the Setup Wizard to show up and ask you to install an SDK on each startup. To work around this, you can edit the idea.properties file in the bin folder such that it has the below line as well:
disable.android.first.run=true

PLEASE NOTE: This will break patch updating to the next version. We now check full binary checksums on the whole installation to prevent various install corruption bugs as well as to preserve application signatures. Therefore, make a copy of this file first, and before updating, put it back. (Alternatively, just download the full image of RC2 when it is released.)

"minSdkVersion 19  cannot be smaller than version L"

If your build fails with an error message like this:
:app:processDebugManifest app/src/main/AndroidManifest.xml:0:0 Error:
uses-sdk:minSdkVersion 19 cannot be smaller than version L declared in library app/build/intermediates/exploded-aar/com.android.support/appcompat-v7/21.0.0-rc1/AndroidManifest.xml
Suggestion: use tools:overrideLibrary="android.support.v7.appcompat" to force usage

you are using an obsolete version of the Android support libraries. Open up the SDK manager and update to the latest (non-preview) versions.

"Android SDK folder inside the application folder"

When updating to version 0.8.13 or newer, the patch installation may detect the Android SDK folder inside your application folder. If this occurs, you must move your sdk folder outside of the application folder for the update to take place. Once Android Studio is updated, on its first run it will ask you for the location of the sdk. Projects that were referencing the old sdk location will be automatically updated once opened in Android Studio. We do not recommend moving the sdk directory back into Android Studio as this would interfere with the application signature, particularly on MacOS, and would prevent future updates to do verifications and avoid corrupted installations. More information in issue 78129.

To move the SDK folder in Windows or Linux, simply go to Android Studio's folder and drag the "sdk" folder to another location, such us your user directory or alongside Android Studio's folder. On MacOS go with Finder to the application folder called "Android Studio.app", right click on it and select "Show Package Contents". When its contents are shown you can now drag the "sdk" folder to its new location.

(We have some additional information and screenshots for this in Android Studio 0.8.14 in Beta Channel).

Linux and the Awesome WM

In Android Studio 0.8.3+:
Studio 0.8.3 does not work properly on Linux with the "Awesome WM" window manager version 3.4. It's supposed to work with 3.5.

Can't Update to Latest Version

On Windows, files that are in use by a process cannot be deleted. 

When you attempt to use the builtin update mechanism in the IDE, it sometimes refuses to install the update, usually providing an error message like "Can't delete C:\some\path\file".
To work around this, open the task manager and attempt to kill processes that may be using the file, such as any gradle daemons.

Google Play Services 5.0.77
If your builds suddenly stop working with this error message:
  Error: Failed to find: com.google.android.gms:play-services:5.0.77
this is caused by the play services artifact being removed from the local Google Maven repository because it contained some critical bugs. It was been replaced by version 5.0.89 instead. (More information)

Google Play Services "5.2.8"

(This issue is fixed in Android Studio 0.8.6)
A new version of the Google Play Services library was released recently: 5.2.08. If you are using an older version of the library, Android Studio will automatically offer to upgrade it to the new version. However, due to a bug, it drops the leading zero in "08", which means it replaces the dependency with "5.2.8" instead of "5.2.08" which does not work. To fix this, edit the dependency to read "5.2.08" instead of "5.2.8". (More information).