A new estimator of the pairwise relatedness coefficient between individuals adapted to dominant genetic markers is developed. This estimator does not assume genotypes to be in Hardy–Weinberg proportions but requires a knowledge of the departure from these proportions (i.e. the inbreeding coefficient). Simulations show that the estimator provides accurate estimates, except for some particular types of individual pairs such as full-sibs, and performs better than a previously developed estimator. When comparing marker-based relatedness estimates with pedigree expectations, a new approach to account for the change of the reference population is developed and shown to perform satisfactorily. Simulations also illustrate that this new relatedness estimator can be used to characterize isolation by distance within populations, leading to essentially unbiased estimates of the neighbourhood size. In this context, the estimator appears fairly robust to moderate errors made on the assumed inbreeding coefficient. The analysis of real data sets suggests that dominant markers (random amplified polymorphic DNA, amplified fragment length polymorphism) may be as valuable as co-dominant markers (microsatellites) in studying microgeographic isolation-by-distance processes. It is argued that the estimators developed should find major applications, notably for conservation biology.