Dialogue Writing Tips:

Dialogue is about showing character through conflict. Keep to the conflict. If there is no conflict for the two characters in a piece of dialogue, then the dialogue has no place in your story. The conflict can be internal (he's lying to her, she doesn't like him) or external (a wall of water is sweeping down on the two of them; someone has stolen her purse or their car). But it has to be there. Dialogue illuminates character faster than any amount of exposition, but only if you give your characters something interesting to talk about and something that moves your story forward. And that means conflict.

Dialogue is not speech written down. Include only the important things your characters say. Eliminate all of the repetition and hemming and hawing you find in real speech.

Dialogue is not conversation. Real conversation is dead boring to read. With dialogue you need to create the illusion of real conversation but pare the interaction down to as few lines as possible to convey the necessary information (plot development, characterization, etc). Avoid meaningless or routine exchanges. How exciting is it to read "Hi, Joe. How are you?" "Oh, I'm fine, Sam. How are you?" "Can't complain. Wife doing well, is she?" and so on, every time two characters meet? Not exciting at all, is it? It's boring. Whether or not real people talk that way is irrelevant. Fiction is art, not real life.

Use “said” if you need to indicate who is talking. Don’t get fancy with words like “exclaimed”, responded, interjected, etc. These terms generally distract the reader from the meaning of the conversation. . Something like "he shrieked" can be useful, but make sure that the word you choose is accurate (did he really shriek?). Also make sure any tag you use can actually replace "said." You can't say, for example: "Go over there," he gesticulated. Gesticulation is not a kind of speech. You could say: "Go over there," he said, gesticulating.

If you have only two people talking, use “said” (dialogue tags) as little as possible, just enough so you are sure that your reader will be able to follow who is talking. Don't overuse "he said" and "she said." Do realize, however that these particular dialogue tags are nearly invisible to the reader (in other words, they won't notice how many you have until you do overuse them), and should be used as necessary to clarify who is speaking.

Avoid "talking heads." Have characters do something while they speak. They might be doing the dishes, or playing a board or card game, or cleaning a room. You can then use descriptive narration about what they are doing to reveal more about the characters and to pace the dialogue.

Intersperse descriptive narration with your dialogue to give it detail and context and to add more information: "I'm not sure," she said, pushing a hand through her hair. She shifted her weight to the other foot and back again. "If you think I should, though, I will."

Don't overuse direct address. Sam does not have to say "Joe"” every time he talks to Joe. It becomes annoying fast. "Say, Joe, what is that you're doing?" "Well, Sam, I'm fixing my car." "I didn't know it was broken, Joe." "You know my car is always breaking down, Sam." And so on.

Don't let characters "speechify." What worked in a Shakespeare monologue does not work in a dialogue between two people. Fictional dialogue is about give and take, meant to sound realistic but sharpened by the fact that each character needs something, and by the fact that their needs do not mesh. You won't get two-page speeches if you remember this. 

Remember that people breathe while speaking. Read your dialogue out loud, in your normal, conversational tone of voice. If you run out of air part of the way through a sentence, rework it. Add punctuation, break it up, rip out the flowery stuff.