The more you get right in your manuscript before submitting to your editor, the less work they'll have to do on mechanical issues—and the more time they can spend on making your writing shine. Plus, learning the conventions of fiction style* can save you money.
*This is Articulate Editing house style, which is based on generally accepted fiction conventions (in the US) and a tiny pinch of personal opinion. Most of what is written here will apply across the board. If a guideline has wiggle room, I'll let you know. And if you're working with a publisher, make sure you follow their specifications as their house style may differ slightly. (This style guide also applies to creative nonfiction.)
Styling ellipses and em dashes
Quotation marks with dialogue
Surround dialogue with double quotation marks. This is the convention in US English. Use curly—or "smart"—quotation marks, not straight like the ones in this sentence.
Use single quotation marks in fiction only when embedding quotes inside quotes. All other instance—whether showing irony or indicating titles of songs—take double quotation marks (unless nested inside a quotation).
Gary snorted. "Right! Next you'll be telling me she said, 'That Gary is quite a catch.'"
"Is 'Lucy in the Sky with Diamonds' your favorite song?"
"Lucy in the Sky with Diamonds" was his "favorite" song.
This is reversed in British English. Across the pond, single quotes are used for the initial quotation, and double quotes are nested inside.
Alternatives to quotation marks
Occasionally, em dashes are used to set off dialogue. The example below is from James Joyce's A Portrait of the Artist as a Young Man.
Writers of literary fiction sometimes forgo quotation marks and run dialogue through the narrative to create a desired effect. The example below is from William Carlos Williams's short story "The Use of Force."
Not using quotation marks has had a resurgence recently—award-winning novelists Junot Diaz and Louise Erdrich are excellent examples—but in genre fiction, following convention is usually preferable.
Dialogue tags are set off with commas even though technically they're independent clauses (since they have a subject and a verb). Like tag questions,* they're a special case.
Dialogue tags must contain speech verbs such as said, asked, murmured, whispered, shouted, answered, replied, and continued. Fancy speech verbs such as opined or ejaculated(!) should generally be avoided. Some verbs that don't really describe speech are still sometimes accepted as speech verbs, such as barked, hissed, snarled, spat—but use these sparingly.
Said should be your go-to speech verb. It's practically invisible—unless you overuse dialogue tags in general. Your dialogue should be the center of attention, not your dialogue tags (though the acceptability of fancy dialogue tags—also known as "said bookisms"—is somewhat genre specific). Please note that though this the current style, it is not a rule.
*Tag questions are questions that follow a statement and ask for confirmation of that statement. Technically they're complete sentences, but they're separated from the main clause by only a comma: "It's a beautiful day, isn't it?" In the preceding sentence, "isn't it?" is a tag question.
Capitalize the first word of dialogue whether it's a complete sentence or not. The only exception is when dialogue is resumed after an interruption (see section on interrupted dialogue below).
End a line of dialogue that has no tag with a period. It's considered a complete sentence. The period always goes inside the ending quotation mark in American English.
"Well, that just stinks."
This is true even if it's followed by an action beat. Since the action beat is a new sentence, it starts with a capital letter.
"Well, that just stinks." He sniffed contemptuously.
Since sniffed isn't a speech verb (you can't create words with your nose😉), it can't be part of a dialogue tag.
"Well, that just stinks," he sniffed contemptuously. X
If a line of dialogue is followed by a tag, the dialogue ends with a comma and the comma goes inside the closing quotation mark.
"Well, that just stinks," Tom said.
The first word of the tag is lowercase. (Unless it's a proper noun).
"Well, that just stinks," he said with a contemptuous sniff.
If the dialogue tag comes before the dialogue, the tag ends with a comma, and the dialogue starts with a capital letter.
He sniffed and said, "Well, that just stinks."
The first word of the tag needs to be lowercase after exclamation points and question marks— even though these are generally terminal punctuation.
"Well, that just stinks!" He bellowed. X
"Well, that just stinks!" he bellowed. ✓
"Well, that just stinks, doesn't it?" he asked. ✓
Interrupting speech with dialogue tags
If a dialogue tag interrupts mid-sentence, commas both precede and follow the tag, and the first word of the second part of the dialogue is lowercase.
"I don't believe," Jeremy said, "that this is happening to me ... again!"
If the second part of the dialogue is a complete sentence, the dialogue tag should end with a period and the second part of the dialogue should start with a capital letter.
"I don't believe it," Jeremy said. "Why is this happening to me ... again?"
When a coordinating conjunction starts the second part of the dialogue, the writer can choose how to punctuate, depending on the rhythm desired.
"I don't believe it," Jeremy said, "and I don't understand why this is happening to me."
"I don't believe it," Jeremy said. "And I don't understand why this is happening to me."
Interrupting speech with action
If an action beat interrupts dialogue in the middle of a sentence, em dashes are needed to set it off. While commas are enough to set off dialogue tags in the middle of a sentence (dialogue tags are not treated like independent clauses even though technically they are), the same is not true of action beats.
"I don't believe"—Jeremy grabbed fistfuls of his hair—"that this is happening to me ... again!"
The dashes are outside of the quotation marks and there are no spaces on either side.
If an action beat interrupts dialogue after a complete thought, the initial dialogue should end with a period (or other terminal punctuation). The action beat should also end in a period. The first word of the second part of the dialogue begins with a capital letter.
"I don't believe it." Jeremy grabbed fistfuls of his hair. "Why is this happening to me ... again?"
Punctuating speech that is abruptly cut off
Punctuate dialogue that is cut off with an em dash, whether the interruption is by another speaker or by something else. This is true in both American and British English. Since the dash shows the interruption, it's usually unnecessary to tell the reader of the interruption with a dialogue tag like "he interrupted."
Ellipses are often mistakenly used for interruptions, but ellipses at the end of the dialogue indicate a trailing off. In the example below, a hesitant pause is created that changes the emotional tone of both lines of dialogue. (There is no space between the final dot of the ellipsis and the closing quotation mark.)
Only the interrupted dialogue gets an em dash. The interrupter's dialogue does not, even if it finishes the sentence of the first speaker.
If a speaker continues on with their dialogue despite the interruption, an em dash interrupts the first part, and introduces the second part. The first word of the second part is lowercase.
Stammers and stutters and pauses (oh my!)
Though there's some overlap and flexibility, ellipses and dashes (and hyphens) play different roles in dialogue.
Use ellipses to show faltering speech, hesitation, uncertainty, pauses, and trailing off.
"Um ... I ... I think ... would you consider it? The proposal, I mean."
Use em dashes to indicate abrupt shifts in thought or interruptions in the middle of the dialogue. (British English uses en dashes with spaces on either side.)
"I'll pick up the—wait a minute, I forgot I have an appointment scheduled."
"Will he—can he—obtain the necessary signatures?"
Be careful when choosing between em dashes and ellipses, since they're often not interchangeable. In the above sentence (from CMOS 6.87), the speaker is deliberately choosing to say "can he" in order to clarify his meaning and make a point. But changing the em dashes to ellipses communicates something different: that the speaker is struggling to find the right words.
"Will he ... can he ... obtain the necessary signatures?"
Use hyphens to show that a speaker is stuttering (stuck on a consonant sound in a word). Only capitalize repeated letters if the word is a proper noun.
"M-my c-c-cat is lost!"
"M-my name is B-Bobcat."
If the repeated sound is a consonant blend, repeat both letters.
"She has br-brown eyes, cl-cl-clearly."
When a whole word is repeated instead of a consonant sound, it's can be punctuated with em dashes.
"I—I—I just don't believe it."
Ellipses are preferred by The Chicago Manual of Style.
"I ... I ... I just don't believe it."
"But ... but ... but what about me?" said Harry.
Styling ellipses and em dashes
This section is true for narrative text as well as dialogue.
Ellipses for print
In fiction manuscripts that will be formatted for print, the convention is to not use the ellipsis character in your word processing software, but to instead type space, dot, space, dot, space, dot, space. The book designer will then tweak it to look nice with whatever typeface is used.
"Well . . . I'm not sure about that."
Ellipses for e-books
When formatting for e-books, many prefer to use the ellipsis character (with spaces on either side if it appears mid-sentence), since the spaced periods of Chicago Style ellipses can cause issues with wrap—the way text breaks onto a new line. I've seen e-books with no spaces on either side, but this can look cramped and cause issues with wrap.
Something similar happens with em dashes. For print, the preferred style (in American English) is to not have spaces on either side of the dash, but this causes some e-readers to treat the dash and both words on either side as a single long word, leading to ugly wrapping. So for digital text, it's better to use spaces.
If you're working with a publisher, make sure you follow their style guidelines for dashes and ellipses.
Other punctuation with dashes and ellipses
Em dashes and other punctuation
Exclamation points or question marks can precede an em dash, but commas, semicolons, and colons cannot. A period can only precede an em dash if it's part of an abbreviation (though abbreviations shouldn't be used in dialogue unless they're commonly spoken as abbreviations).
"Roger, if it comes to war—and I pray to God it won't!—will you enlist?"
"I do not—especially at five a.m.—enjoy exercise."
If a dialogue tag follows interrupted speech, the em dash takes the place of the comma.
"Speaking of the girls—" he began, but Julia cut him off.
Ellipses and commas
There is very little in CMOS about using ellipses in fiction dialogue, but the guidelines for using ellipses for omitted text in quoted material is spelled out in great detail. This has led to confusion regarding other punctuation with ellipses in dialogue. CMOS didn't help the matter by including this example:
"But ... but ...," said Tom. X (even though CMOS says it's okay)
It seems inconsistent that the comma would be dropped after an em dash but retained after an ellipsis. And though I see it occasionally in published fiction, the house style of most publishers is to not follow trailing ellipses with commas before dialogue tags. This doesn't mean it's wrong, just that it isn't what's most often done.