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I have Oracle 11g r2 on my machine and when I open Oracle SQL Developer it displays: java 1.6.0_02 is not supported and insists me to install a new Java version.

So I installed JDK 1.6.0_27 and set the path in environment variables and ran Oracle SQL Developer again, but I am getting the same error.

What is the way to change settings for Oracle SQL Developer to recognize 1.6.0_27 as my SDK?

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The sqldeveloper.conf under sqldeveloper/bin in the SQLDeveloper base directory contains the entry for the used java_home.

Therefore, on Windows, if you have unzipped SQLDeveloper to C:\sqldev then sqldeveloper.conf is under C:\sqldev\sqldeveloper\bin

It must have displayed:

SetJavaHome C:\Program Files\Java\jdk1.6.0_20

You need to Quit SQLDeveloper, then remove this entry and relaunch SQLDeveloper. You will be prompted for the location of Java.

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