Java "lambda expressions not supported at this language level"

Question

In IntelliJ IDEA:

In File Menu → Project Structure → Project, change Project Language Level to 8.0 - Lambdas, type annotations etc.

For Android 3.0+ Go File → Project Structure → Module → app and In Properties Tab set Source Compatibility and Target Compatibility to 1.8 (Java 8)

Screenshot:

You should change source code Language Level also on the Source tab (Modules part).

This solution works in Android Studio 3.0 or later.

1. File > Project Structure > Modules > app > Properties tab

Change both of Source Compatibility and Target Compatibility to 1.8

2. Edit config file

You can also configure it directly in the corresponding build.gradle file

android {
  ...
  // Configure only for each module that uses Java 8
  // language features (either in its source code or
  // through dependencies).
  compileOptions {
    sourceCompatibility JavaVersion.VERSION_1_8
    targetCompatibility JavaVersion.VERSION_1_8
  }
}

For intellij 13, Simply change the Project language level itself to 8.0 with following navigation.

File
|
|
 ---------Project Structure -> Project tab
          |
          |________Project language level

Module lang level

I also had to update Modules lang level when there was no maven plugin for java compiler.

File
|
|
 ---------Project Structure -> Modules tab
          |
          |________ language level

But this Module lang level would automatically be fixed if there's already a maven plugin for it,

    <plugin>
        <groupId>org.apache.maven.plugins</groupId>
        <artifactId>maven-compiler-plugin</artifactId>
        <version>3.6.0</version>
        <configuration>
            <source>1.8</source>
            <target>1.8</target>
        </configuration>
    </plugin>

After changes everything looks good

In Android studio canary build(3.+), you can do the following:

File -> Project Structure -> Look in Modules Section, there are names of modules of your class. Click on the module in which you want to upgrade java to 1.8 version. -> Change "Source Compatibility" and "Target Compatibility" to 1.8 from 1.7 or lower. Do not change anything else. -> Click Apply

now gradle will re-sync and your error will be removed.