Just updated Android-Studio to version 0.2.7 an now I get the error message from the title:
We have two computers, one of which gave that same message after upgrading to Android Studio 0.2.7. We noticed that the computer which could still build had Gradle installed independently of Android Studio.
Installing Gradle 1.6 downloaded from the Gradle web site fixed this issue on the computer that wouldn't build.
I managed to fix my project through some combination of invalidating Android Studio cache, deleting .idea and .gradle directories and .iml files, restarting Studio, and reimporting the project:

on Mac OSX using Homebrew, brew install gradle then pick local gradle distribution and point to /usr/local/Cellar/gradle/1.7/libexec for gradle home:

My fix was basically what Abe did but I wanted to give a bit more explanation:
Download gradle 1.6 from the gradle website
Extract somewhere on your pc/mac
Open up android studio, go to Preferences -> Gradle (left panel) -> and chooose Local gradle distribution. Point Gradle home to the location where you extracted gradle.
This fixed the issue for me. Using the gradle wrapper and the bundled gradle distribution both failed
Here's what I did to get my project working:
local.properties file: sdk.dir=/Applications/Android\ Studio.app/sdkgradle wrapper command.In my case, i updated gradle to the latest version (1.8) and then changed the gradle.build files (for my project and for the libraries i was using) like these:
dependencies {
classpath 'com.android.tools.build:gradle:0.6.1+'
}
The Synchronize files and Refresh/Invalidate cache. This seems to solve the problem. I think that Gradle in order to determine the minimum required version just reads the above value.
gradle-wrapper.properties and change the distributionUrl to use 1.7 if it is not already (mine was 1.6), i.e. distributionUrl=http\://services.gradle.org/distributions/gradle-1.7-bin.zip