We improve and extend a method introduced in an earlier paper for deri
ving string field equations. The idea is to impose conformal invarianc
e on a generalized sigma model, using a background field method that e
nsures covariance under very general non-local coordinate transformati
ons. The method is used to derive the free string equations, as well a
s the interacting equations for the graviton-dilaton system. The full
interacting string field equations derived by this method should be ma
nifestly background independent. (C) 1998 Elsevier Science B.V.