The statistic known as Moran's I is widely used to test for the presence of spatial dependence in observations taken on a lattice. Under the null hypothesis that the data are independent and identically distributed normal random variates, the distribution of Moran's I is known, and hypothesis tests based on this statistic have been shown in the literature to have various optimality properties. Given its simplicity, Moran's I is also frequently used outside of the formal hypothesis-testing setting in exploratory analyses of spatially referenced data; however, its limitations are not very well understood. To illustrate these limitations, we show that, for data generated according to the spatial autoregressive (SAR) model, Moran's I is only a good estimator of the SAR model's spatial-dependence parameter when the parameter is close to 0. In this research, we develop an alternative closed-form measure of spatial autocorrelation, which we call APLE, because it is an approximate profile-likelihood estimator (APLE) of the SAR model's spatial-dependence parameter. We show that APLE can be used as a test statistic for, and an estimator of, the strength of spatial autocorrelation. We include both theoretical and simulation-based motivations (including comparison with the maximum-likelihood estimator), for using APLE as an estimator. In conjunction, we propose the APLE scatterplot, an exploratory graphical tool that is analogous to the Moran scatterplot, and we demonstrate that the APLE scatterplot is a better visual tool for assessing the strength of spatial autocorrelation in the data than the Moran scatterplot. In addition, Monte Carlo tests based on both APLE and Moran's I are introduced and compared. Finally, we include an analysis of the well-known Mercer and Hall wheat-yield data to illustrate the difference between APLE and Moran's I when they are used in exploratory spatial data analysis. © 2007 The Ohio State University.