The Moran effect for populations separated in space states that the autocorrelations in the population fluctuations equal the autocorrelation in environmental noise, assuming the same linear density regulation in all populations. Here we generalize the Moran effect to include also nonlinear density regulation with spatial heterogeneity in local population dynamics as well as in the effects of environmental covariates by deriving a simple expression for the correlation between the sizes of two populations, using diffusion approximation to the theta-logistic model. In general, spatial variation in parameters describing the dynamics reduces population synchrony. We also show that the contribution of a covariate to spatial synchrony depends strongly on spatial heterogeneity in the covariate or in its effect on local dynamics. These analyses show exactly how spatial environmental covariation can synchronize fluctuations of spatially segregated populations with no interchange of individuals even if the dynamics are nonlinear.