XML Shape Drawable for Dialog Backgrounds. Applies a fixed outer margin to keep background from fully stretching to screen edge, and allows for additional internal padding to apply to the dialog content.

dialog_background.xml

<?xml version="1.0" encoding="utf-8"?>
<layer-list xmlns:android="http://schemas.android.com/apk/res/android">
    <!-- Apply the margin value on the "item" element -->
    <item
        android:top="15dp"
        android:bottom="15dp"
        android:left="15dp"
        android:right="15dp">
        <shape
            android:shape="rectangle">
            
            <!-- Add attributes specific to your background (e.g. corner radius, colors, etc.) -->

            <!-- Set "padding" at minimum to match margin and add additional content padding as well, if desired -->
            <padding
                android:top="25dp"
                android:bottom="25dp"
                android:left="25dp"
                android:right="25dp" />
        </shape>
    </item>
</layer-list>

This is a method for implementing custom Dialog backgrounds in Android that provide outer margins and inner padding in the same fashion as developers expect from the default framework implementations. The framework achieves this through 9-patch images, which is also a great solution. This shows how to achieve the same result if your background drawable is generated in XML.

Helped me to realize how to add margins to shape drawables - just what the doctor ordered! Thanks.