1) You must become the character that you write about.  Any serious actor will spend a great deal of time getting to know the person he is to portray.  In some ways, the writer must do the same.  You must first believe in this character.  It is a good idea to know more about your character than you actually put on the page.
2) Find the voice of the character.  If you know your character, then you should have an idea of how the person speaks.  Is the character loud and boisterous?  Is the character timid, speaking in a soft voice?   Does the character exude confidence when he speaks?  Are there words he constantly says?  This could tell a lot about the character. Is he negative, impatient, or screw up his words?   
3) Match the mood of the story.  If the story becomes tense, the dialogue should be tense as well.  If done right, it will intensify the mood, making the story richer and will serve to move and/or deepen the plot.
4) Pacing.  Dialogue in a story can speed up or slow down the pace.  To speed it up, you should use short, quick remarks, often words that display an urgency to the scene.  To slow down the pace, you might want to expand the dialogue
     1)  Avoid a dialogue that goes nowhere.  If the dialogue does not advance the scene by adding some type of insight, then it should be avoided.
     2)  Avoid leaping.  Don’t jump directly from problem to solution.  There should be some steps in between.  If not, the reader is likely to feel cheated and mentally dizzy from the jump.