Apple script to open an iterm2 tab from right-clicking on a file or folder in Finder.To use:(1) Open Automator(2) Create a new service(3) Change "Service receives selected" drop downs to "Files or folders" in "Finder"(4) Select "Run applescript" from the sidebar, then paste this script in and save

Open iterm tab here

-- Adapted from these sources:
-- http://peterdowns.com/posts/open-iterm-finder-service.html
-- https://gist.github.com/cowboy/905546
-- 
-- Modified to work with files as well, cd-ing to their container folder
on run {input, parameters}
	tell application "Finder"
		set my_file to first item of input
		set is_folder to (do shell script "file -b " & quoted form of (POSIX path of my_file))
		if is_folder ends with "directory" then
			set dir_path to quoted form of (POSIX path of my_file)
		else
			set dir_path to quoted form of (POSIX path of (container of my_file as string))
		end if
	end tell
	CD_to(dir_path)
end run

on CD_to(theDir)
	tell application "iTerm"
		activate
		set go_dir to "cd " & theDir
		try
			set newWindow to current window
		on error
			set newWindow to (create window with default profile)
		end try
		tell newWindow
			tell current session of (create tab with default profile)
				write text go_dir
			end tell
		end tell
	end tell
end CD_to

Guys, is there a possibility to make it also drop down the iterm hotkey window when it's run? For me it really opens a new tab with that folder but iterm stays unrevealed and I have to drop it down on my own, with alt + space

Works! Thanks.

I had some trouble with this service not handling new window instances very gracefully; it would crash if iTerm was already open.
I've made some slight modifications here, that opens only one tab if iTerm wasn't running before, or otherwise makes a new tab if iTerm already has some running sessions.

Works! Thanks.

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For those who still receiving errors(this script WFM for years till now, 10.13), follow the instruction in the descriptions, most importantly change "Service receives selected" drop downs to "Files or folders" in "Finder" so that my_file variable would correctly set by right click on finder item.