Morality does not require God. Atheists are demonstrably moral people, secular societies are often more humane than religious ones, and we do not need a deity to work out that cruelty is wrong.

Why people find it persuasive

Every part of the observation is true and the objection is usually made in defense of someone's dignity, which is why an argumentative response goes badly. Non-religious people raise good children, keep promises, and give to strangers. Nordic countries with low religiosity score well on most measures of social welfare. If the moral argument implied otherwise it would be refuted by walking outside.

Important distinctions

• • Moral epistemology (how we know right from wrong) vs. moral ontology (what makes anything right or wrong).
• • Being good vs. being able to account for why anything is good.
• • Objective moral values (some things really are good) vs. objective moral duties (some things are really obligatory).
• • Whether God is needed for moral behavior vs. whether God is needed to ground moral facts.

Christian response

• • Concede the point immediately and mean it. No competent defender of the moral argument claims atheists cannot be moral or that they behave worse; the claim is about what grounds moral facts, not who obeys them. Craig has stated this in nearly every debate he has given on the topic, and the concession is not a rhetorical setup. On the Christian view, every human being bears God's image and has the moral law written on the heart, so a Christian should positively expect atheists to perceive moral truth clearly. An apologist who implies otherwise has abandoned his own theology.
• • Then locate the actual question. The argument is not 'you cannot be good without God' but 'if there is no God, what makes anything good?' Compare: someone can be an excellent mathematician with no view whatever about what numbers are. Practicing a domain competently and giving a metaphysical account of it are separate tasks, and it is no insult to say a person is doing the first without the second. Reframing this way usually defuses the conversation, because the objector was defending his character and the argument was never about his character.
• • Now press the grounding question specifically about obligation, which is where the difficulty concentrates. It is comparatively easy for a naturalist to explain that cooperation is beneficial and that we have strong feelings about fairness. It is much harder to explain a duty — something you owe, that binds you whether or not it benefits you, that you are guilty for violating even when nobody finds out. Elizabeth Anscombe made this point in 'Modern Moral Philosophy': the vocabulary of moral obligation was inherited from a law conception of ethics, and continuing to use it after discarding the lawgiver leaves a concept without its supporting framework. J.L. Mackie, an atheist, drew the same conclusion in the opposite direction with his argument from queerness.
• • Handle Euthyphro head-on rather than dodging it, because it will come and dodging it costs credibility. Is a thing good because God commands it, or does God command it because it is good? The standard theistic answer, developed by Robert Adams and William Alston, rejects the dilemma: goodness is identified with God's own nature, not with an arbitrary decree and not with an independent standard God consults. Commands flow from that nature, so they are neither arbitrary nor answerable to something above God. One may reject that answer, but it must be engaged rather than treated as though it were never given.
• • Finally, be honest that metaethics is a genuinely open field and that overstating this argument is the most common apologetic mistake here. Non-theistic moral realists like Derek Parfit and Erik Wielenberg have developed serious positions on which moral facts are objective, non-natural, and simply brute. Those positions have costs — brute normative facts, and an unexplained coincidence between what is good and what evolved minds perceive as good — but they are not obviously incoherent. The argument's honest conclusion is that theism accounts for moral obligation more economically than its rivals, not that atheism entails nihilism.

Christian counterresponse

The theist replies that the two stopping points differ in what they can do. Personal obligation is naturally at home in a relation between persons and strange as a free-floating abstract fact: it is intelligible that you owe something to someone, and much less clear what it means to owe something to a non-natural property. Theism also explains the fit between moral truth and our capacity to perceive it, which the brute-fact view has to treat as a lucky coincidence. Wielenberg has answered this, and the exchange is ongoing and unresolved.