The problem

If you encounter this problem when running Ruby on Rails:

OpenSSL::SSL::SSLError (hostname "localhost" does not match the server certificate)

it is likely due to ActionMailer using the smtp as the delivery_method and your local mail server supporting TLS/SSL, but not having a correct/valid certificate.

The solution

You can add a valid certificate, but if the server is just used for sending out mails, this may not be suited. In that case, you can change the delivery_method to sendmail, which makes ActionMailer use the sendmail binary directly.