Recently it has become feasible to detect long blocks of nearly identical sequence shared between pairs of genomes. These identity-by-descent (IBD) blocks are direct traces of recent coalescence events and, as such, contain ample signal to infer recent demography. Here, we examine sharing of such blocks in two-dimensional populations with local migration. Using a diffusion approximation to trace genetic ancestry, we derive analytical formulas for patterns of isolation by distance of IBD blocks, which can also incorporate recent population density changes. We introduce an inference scheme that uses a composite-likelihood approach to fit these formulas. We then extensively evaluate our theory and inference method on a range of scenarios using simulated data. We first validate the diffusion approximation by showing that the theoretical results closely match the simulated block-sharing patterns. We then demonstrate that our inference scheme can accurately and robustly infer dispersal rate and effective density, as well as bounds on recent dynamics of population density. To demonstrate an application, we use our estimation scheme to explore the fit of a diffusion model to Eastern European samples in the Population Reference Sample data set. We show that ancestry diffusing with a rate of s % 50 À À100 km= ffiffiffiffiffiffiffiffi gen p during the last centuries, combined with accelerating population growth, can explain the observed exponential decay of block sharing with increasing pairwise sample distance.KEYWORDS demographic inference; identity by descent; isolation by distance; dispersal rate; effective population size T HERE has been a long-standing interest in estimating demography, as migration and population density are key parameters for studying evolution and ecology. Demographic models are essential for disentangling the effects of neutral evolution from selection, and are crucial to understanding local adaptation. Moreover, the inference of demographic parameters is important for conservation and breeding management. Given the intensive nature of obtaining such parameters by direct observations, which are moreover necessarily limited to short timescales, the increasing availability of genetic markers has spurred efforts to develop inference methods based on genetic data.This work focuses on estimating dispersal rate and population density in two-dimensional habitats by analyzing the geographic distribution of so-called identity-by-descent (IBD) blocks, which are commonly defined as co-inherited segments delimited by recombination events (see Figure 1). It has now become feasible to detect long regions of exceptional pairwise similarities from dense SNP or whole genome sequences (Gusev et al. 2009;Browning and Browning 2011). For regions longer than a few cM, the bulk mostly consists of a single IBD block unbroken by recombination, at least when inbreeding is rare (Chiang et al. 2016). This yields novel opportunities for inferring recent demography, as one can study the direct traces of coancestry.M...