To make an automatic ActiveRecord database connection using ENV[‘DATABASE_URL’] The following snippet can be used:

From ActiveRecord 3.2.1 connections can be made with :

ActiveRecord::Base.establish_connection(ENV["DATABASE_URL"])

At some stage My first example also stopped working, Heroku have this example on there pages:

  db = URI.parse(ENV['DATABASE_URL'] || 'postgres://localhost/mydb')

  ActiveRecord::Base.establish_connection(
    :adapter  => db.scheme == 'postgres' ? 'postgresql' : db.scheme,
    :host     => db.host,
    :port     => db.port,
    :username => db.user,
    :password => db.password,
    :database => db.path[1..-1],
    :encoding => 'utf8'
  )

My original example for parsing the env variable and making he DB connection.

module ExampleSinatra
  class App < Sinatra::Base
    use Rack::MethodOverride
    set :public, "public"

    configure :production do
      db = ENV["DATABASE_URL"]
      if db.match(/postgres:\/\/(.*):(.*)@(.*)\/(.*)/) 
        username = $1
        password = $2
        hostname = $3
        database = $4

        ActiveRecord::Base.establish_connection(
          :adapter  => 'postgresql',
          :host     => hostname,
          :username => username,
          :password => password,
          :database => database
        )
      end
    end
  end
end
if $0 == __FILE__
  ExampleSinatra::App.run!
end

From Heroku connecting using Sequel or Datamapper is a little simpler:

Sequel.connect(ENV['DATABASE_URL'] || 'sqlite://my.db')
DataMapper.setup(:default, ENV['DATABASE_URL'] || 'sqlite3://my.db')