I have added a custom field to taxonomy vocabulary. Now I need to use contextual filter from Views to display items that matches that custom field value in URL, e.g. /my_page/custom_field_value . Is it possible with Drupal 7 and Views 3.x ?
Yes! If the view is a view of nodes you have to add the relation based on the term field, than you should have the contextual filter available.
Or you can use a term view with the custom field as the filter and create a relationship to content tagged with the taxonomy term. That way you can modify the title of the view to match the term as well.