Excluded-volume effects can play an important role in determining transport properties in diffusion of particles. Here, the diffusion of finite-sized hard-core interacting particles in two or three dimensions is considered systematically using the method of matched asymptotic expansions. The result is a nonlinear diffusion equation for the one-particle distribution function, with excluded-volume effects enhancing the overall collective diffusion rate. An expression for the effective (collective) diffusion coefficient is obtained. Stochastic simulations of the full particle system are shown to compare well with the solution of this equation for two examples. © 2012 American Physical Society.