Chrome caches DNS records and tends to ignore changes to the hosts file after it has successfully connected to my site (barring a restart). With DNS pre-fetching enabled, it is
In my case I often switch from my dev web server and a production server using custom hosts files, in order to clear all the dns cached info from chrome I use this procedure, and it works instantly in the same tab where I need to load the updated web site address:
This is probably a real bug in Google Chrome. I created http://crbug.com/65570 to track it, but please add any additional information you can think of to the bug so we're sure we understand your problem correctly.
It sounds as though the only work-around besides closing Chrome is unplugging the network cable and then plugging it back in. When Chrome sees such an event, it drops its socket and dns cache. The correct solution for the bug is likely to do the same when we see /etc/hosts has changed.
If you'd like to know when the bug is fixed, go to http://crbug.com/65570 and click the star next to the bug number. And, like I said, please add any additional information you can to the bug.
I'm not sure if this is exactly what you're looking for, but this annoys me too switching dev environments, and I stumbled across this internal chrome page that lets you clear the cache by the click of a button:
chrome://net-internals/#dns. After going there click the Clear host cache
button.
Edit
As noted in an answer below, the reason this doesn't immediately take effect is that you also need to flush the open sockets. After clearing DNS cache, also go to: chrome://net-internals/#sockets and click on the Flush socket pools
buttons.
Also keep in mind the operating system might do its own level of caching. Linux doesn't cache dns entries I think (at least for me clearing the chrome cache is good enough), but for windows or mac you might need to flush the OS-level DNS cache as well. Run ipconfig /flushdns
from command line for windows or sudo dscacheutil -flushcache
from command line for mac.