sample.java

service.getRepo("123")
  .subscribeOn(Schedulers.io())
  .observeOn(AndroidSchedulers.mainThread())
  .subscribe(
    repo -> 
      repoView.setText(repo.getName()),
    e -> { /* show some error message */ }
  );
  
Observable mockObservable = mock(Observable.class);
when(service.getRepo(anyString()))
  .thenReturn(mockObservable);
when(mockObservable.subscribeOn(any()))
  .thenReturn(mockObservable);
when(mockObservable.observeOn(any()))
  .thenReturn(mockObservable);
ArgumentCaptor<Func1> functCaptor = 
  ArgumentCaptor.forClass(Func1.class);
when(mockObservable.map(functCaptor.capture()))
  .thenReturn(mockObservable);
ArugmentCaptor<Action1> onNextCaptor = 
  ArgumentCaptor.forClass(Action1.class);
ArugmentCaptor<Action1> onErrorCaptor = 
  ArgumentCaptor.forClass(Action1.class);

activity.onCreate(null);

verify(mockObservable)
  .subscribe(
    onNextCaptor.capture(),
    onErrorCaptor.capture()
  );

functCaptor.getValue()
  .call(new Repo("WTF!?"));
  
Action1 onNext = onNextCaptor.getValue();
onNext.call(new Repo("WTF!?"));

assertThat(repoView).hasText("WTF!?")