Actually, you have at least 2 ways to do it, the first way is described by ColinD, you just configure the "resources" folder as Sources folder in IDEA. If the Resource Patterns contains the extension of your resource, then it will be copied to the output directory when you Make the project and output directory is automatically a classpath of your application.

Another common way is to add the "resources" folder to the classpath directly. Go to Project Structure | Modules | Your Module | Dependencies, click Add, Single-Entry Module Library, specify the path to the "resources" folder.

Yet another solution would be to put the log4j.properties file directly under the Source root of your project (in the default package directory). It's the same as the first way except you don't need to add another Source root in the Module Paths settings, the file will be copied to the output directory on Make.

If you want to test with different log4j configurations, it may be easier to specify a custom configuration file directly in the Run/Debug configuration, VM parameters filed like:

-Dlog4j.configuration=file:/c:/log4j.properties.

It appears that IntelliJ 11 has changed the method, and the checked answer no longer works for me. In case anyone else arrives here via a search engine, here's how I solved it in IntelliJ 11:

1. Go to the Project Structure, click on Modules, and click on your Module
2. Choose the "Dependencies" tab
3. Click the "+" button on the right-hand side and select "Jars or directories..."
4. Add the directory(ies) you want (note you can multi-select) and click OK
5. In the dialog that comes up, select "classes" and NOT "jar directory"
6. Make sure you're using that Module in your run target

Note that step 5 seems to be the key difference. If you select "jar directory" it will look exactly the same in the IDE but won't include the path at runtime. There appears to be no way to determine whether you've previously selected "classes" or "jar directory" after the fact.