The TL;DR answer

You can put any module in /lib as long as you have autoloading set up properly.

The more nuanced answer

The truth is that you can put your modules anywhere. Personally, my main use for modules is to create namespaces for my Active Record models to help keep things organized. Those module definitions just end up in the same files as my Active Record models.

I have kind of a rule for myself when it comes to Rails file organization. My Rails apps tend to be structures as a mix of Active Record objects and Plain Old Ruby Objects (POROs). The rule is:

If a particular model class (whether it’s an Active Record model class or a PORO model class) pertains specifically to my application, it goes in app/models. If the model class has nothing specifically to do with my application (e.g. it’s a utility class that could conceivably be open-sourced and used in any application), it goes in lib.

How to set up autoloading for modules located in /lib

Modify your config/application.rb to include the following line.

# config/application.rb

module MyApp
  class Application < Rails::Application
    config.eager_load_paths += %W(#{config.root}/lib)
  end
end

Restart your Rails server and you should be good to go.

How to define and include a module

You can define a module like this:

# /lib/foo.rb

module Foo
  def hello
    "hello"
  end
end

When you include that module in a class, you can use the hello function in the class from which you included the module. See the below for how you would use this Foo module.

How to use a module in an ActiveRecord model

You can include a module in a class in your Rails project by using the include keyword followed by the name of your module.

# app/models/customer.rb

class Customer < ActiveRecord::Base
  include Foo
end

Now you should be able to do Customer.new.hello and get “hello” as a result.

Further reading

If you’d like to know more of my thoughts on structuring Rails applications, I’d recommend the following posts.

Extracting a tidy PORO from a messy Active Record model
For organizing Rails projects, domain objects are good and service objects are bad