A new MO-LCAO description of the nephelauxetic effect is proposed based on the concept of the topological atom and on the method of reduced density matrices. This approach allows one to overcome some conceptual difficulties of ligand-field theory and to derive effective parameters of d-d electron repulsion of a bound transition-metal in a proper way. The two ligand-field mechanisms of the nephelauxetic effectthe central field covalency and the symmetry-restricted covalency -are clarified and generalized. In addition, a new factor, important for the nephelauxetic effect is found: its size-dependence on the region of the topological atom.