If you want to draw text in your game, you usually use a BitmapFont. However, there is a downside:

• BitmapFonts rely on an image, so you have to scale them if you want a different size, which may look ugly.

You could just save a BitmapFont of the biggest size needed in your game then and you never have to scale up, just down, right? Well, that's true, but such a BitmapFont can easily take up two times as much space on your hard drive as the corresponding TrueType Font (.ttf). Now imagine you have to ship all your big BitmapFonts with your game and your game uses ten different fonts... on an Android device. Bye bye, free storage!

The solution to your problem is the gdx-freetype extension:

• ship only lightweight .ttf files with your game
• generate a BitmapFont of your desired size on the fly
• user might put his own fonts into your game

Since this is an extension, it is not included in your LibGDX project by default. How you add the extension differs based on the setup of your project.

For Projects Using Gradle

For new projects, simply select the Freetype option under extensions in the setup ui.

To add to an existing Gradle project, see Dependency management with Gradle.

For Projects NOT Using Gradle

In case you don't have it anymore, download the latest nightly build.

Open libgdx-nightly-latest.zip/extensions/gdx-freetype and do the following:

• extract gdx-freetype.jar to your core project's libs folder
• link gdx-freetype.jar to your core, android and desktop project
• extract gdx-freetype-natives.jar to your desktop project's libs folder
• link gdx-freetype-natives.jar to your desktop project
• copy armeabi/libgdx-freetype.so to your android project's libs/armeabi folder
• copy armeabi-v7a/libgdx-freetype.so to your android project's libs/armeabi-v7a folder

You're ready to go.

Using the gdx-freetype extension in your code is really simple.

FreeTypeFontGenerator generator = new FreeTypeFontGenerator(Gdx.files.internal("fonts/myfont.ttf"));
FreeTypeFontParameter parameter = new FreeTypeFontParameter();
parameter.size = 12;
BitmapFont font12 = generator.generateFont(parameter); // font size 12 pixels
generator.dispose(); // don't forget to dispose to avoid memory leaks!

The defaults for the FreeTypeFontParameter:

size = 16;
characters = FreeTypeFontGenerator.DEFAULT_CHARS;
packer = null;
flip = false;
genMipMaps = false;
minFilter = TextureFilter.Nearest;
magFilter = TextureFilter.Nearest;

You can also load BitmapFonts generated via the FreeType extension using AssetManager. See FreeTypeFontLoaderTest

Quoting from http://www.badlogicgames.com/wordpress/?p=2300:

• If you use too big of a size, things might explode. BitmapFonts still only support a single atlas page at the moment, something I'll try to fix in the next couple of weeks. Note that default character set generated by FreeTypeFontGenerator might contains a few characters that you probably will never use, so if you run into the problem caused by big size font, you can request FreeTypeFontGenerator to generate only the characters that will be used by your game, to workaround the problem.
• Asian scripts “might” work, see caveat above though. They contain just too many glyphs. I’m thinking about ways to fix this.
• Right-to-left scripts like Arabic are a no-go. The layout “algorithms” in BitmapFont and BitmapFontCache have no idea how to handle that.
• Throwing just any font at FreeType is not a super awesome idea. Some fonts in the wild are just terrible, with bad or no hinting information and will look like poopoo.

download an example