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According to The NASA Moon Facts page:

The moon is actually moving away from earth at a rate of 1.5 inches per year.

Why is the moon moving further away from the Earth? Is this a result of the moons formation that set it in motion to spiral away from us? Or is this a resultant force of the gravity from the Sun and other large bodies?

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Since it is part of your question, but not explicitly answered in any of the posts to date: no, this has nothing to do with gravitational interaction with any other bodies in the solar system. Furthermore, moving away from the earth does not mean closer to the sun since during half of its revolution, the moon is further from the sun. –  MBurke Dec 2 '14 at 0:00

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Yes, the moon is moving away from Earth at around 1.48" per year. According to the BBC:

The Moon is kept in orbit by the gravitational force that the Earth exerts on it, but the Moon also exerts a gravitational force on our planet and this causes the movement of the Earth's oceans to form a tidal bulge.

Due to the rotation of the Earth, this tidal bulge actually sits slightly ahead of the Moon. Some of the energy of the spinning Earth gets transferred to the tidal bulge via friction.

This drives the bulge forward, keeping it ahead of the Moon. The tidal bulge feeds a small amount of energy into the Moon, pushing it into a higher orbit like the faster, outside lanes of a test track.

So, tidal forces are ultimately what causes this to happen.

Also, there is a Wikipedia article on tidal forces:

Tidal acceleration is an effect of the tidal forces between an orbiting natural satellite (e.g. the Moon), and the primary planet that it orbits (e.g. the Earth). The acceleration causes a gradual recession of a satellite in a prograde orbit away from the primary, and a corresponding slowdown of the primary's rotation. The process eventually leads to tidal locking of first the smaller, and later the larger body. The Earth–Moon system is the best studied case.

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Thought, as the moon gets further away wouldn't the amount of force applied to and from the tide be reducing thus limiting the push of the moon away from us, effectively reducing the distance it moves away each year? Would it not reach a stable orbit where the force is too small to push it further away? –  RhysW Sep 25 '13 at 15:21
@RhysW: The tides are slowing down the Earth's rotation as well as driving the Moon farther out. Ignoring other influences, the effect would stop when the Earth and Moon are both in locked rotation, each showing the other the same face (like Pluto and Charon). –  Keith Thompson Sep 25 '13 at 18:29
@Guillochon: That's not quite what the article says. Currently the barycenter of the Earth-Moon system is inside Earth. Eventually it will be above Earth's surface. The Earth and Moon will still orbit around their common center (as Pluto and Charon do). It's more a matter of the current definition of the word "planet"; there's no great physical significance to it. See also this question on the Physics site (posted to the old Astronomy site before it was merged into Physics). –  Keith Thompson Sep 25 '13 at 18:34
Funny side note; due to pollution, earths gravity is increasing, counteracting the fact that the moon is moving away from us by a tiny amount and instead speeding up the moons orbit. This is because energy also causes gravity, and a warmer planet means more energy here. –  frodeborli Jan 9 '14 at 21:14
@frodeborli - I'm extremely skeptical. How much energy are we talking about? And how much mass would that make? I'm betting it's negligible when compared to the total mass of a planet. –  Donald.McLean Jan 9 '14 at 21:47

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