What makes good dialogue?

[Demesnedenoir]

I will add a little something... If you hand something to someone to read without asking specifically about the dialogue, and they say they don't like the dialogue, that's a red flag in my opinion. Most people aren't going to zero in on that as a criticism unless it stands out; they'll focus on character or plot or something else to hammer you with if they focus on anything at all.

 

[Ankari]

If your story is in 3rd person POV, then that character's dialogue should flow seamlessly with the character's narrative voice.

That would be one kind of narrative, called free indirect speech. This is a form of narration, I think made more popular with the rise of first person PoV.

To the general question:

Good dialog is intriguing and revealing, while also feeling natural. As Devor has stated, good dialog doesn't follow our natural form of speaking. It would ruin the story, burying it deep in pauses and repetition, or misleading the reader by focusing on details that don't matter to the story.

Good dialog has to imitate the natural flow of speaking, while removing all the nonsense we use. It has to move the story without speaking to the reader. It has to contain information but exclude information known to those participating in the dialog. It has to be interesting while appearing contained to the limitations of the speakers.

It's an acquired skilled best honed on the grinding stone of a wide audience unafraid of critiquing your work. I find it best to use writing groups to this end.