Interatomic Coulombic decay (ICD) is a very efficient process by which high-energy radiation is redistributed between molecular systems, often producing a slow electron, which can be damaging to biological tissue. During ICD, an initially-ionised and highly-excited donor species undergoes a transition where an outer-valence electron moves to a lower-lying vacancy, transmitting a photon with sufficient energy to ionise an acceptor species placed close by. Traditionally the ICD process has been described via ab initio quantum chemistry based on electrostatics in free space, which cannot include the effects of retardation stemming from the finite speed of light, nor the influence of a dispersive, absorbing, discontinuous environment. Here we develop a theoretical description of ICD based on macroscopic quantum electrodynamics in dielectrics, which fully incorporates all these effects, enabling the established power and broad applicability of macroscopic quantum electrodynamics to be unleashed across the fast-developing field of ICD.