Abstract-We construct Gray codes over permutations for the rank-modulation scheme, which are also capable of correcting errors under the infinity-metric. These errors model limited-magnitude or spike errors, for which only single-errordetecting Gray codes are currently known. Surprisingly, the error-correcting codes we construct achieve a better asymptotic rate than that of presently known constructions not having the Gray property, and exceed the Gilbert-Varshamov bound. Additionally, we present efficient ranking and unranking procedures, as well as a decoding procedure that runs in linear time. Finally, we also apply our methods to solve an outstanding issue with error-detecting rank-modulation Gray codes (snake-in-the-box codes) under a different metric, the Kendall τ-metric, in the group of permutations over an even number of elements S 2n , where we provide asymptotically optimal codes.