Making sure it is of type Dialog:

2.  In the resource editor, add a simple edit control that will be used to demonstrate how this resizing works:

3. Download the CodeProject library to a location of your choice.

4. Add this downloaded project to the same dialog project you are working on.  To do this, right-click the topmost solution folder and select Add Existing Project:

So that the extra project is added:

5. Right-click on the Dialog (or whatever you called your project)  folder and select “Set Project Dependencies”, making sure ResizableLib is checked:

6. In the Dialog code make sure CDialog is replaced with CResizeableDialog at the following appropriate points.

(i) In the Dialog class (header file) be sure to insert #include “ResizableDialog.h”. In this Dialog class, replace CDialog with CResizableDialog:

#include "ResizableDialog.h"

// CDialogDlg dialog
class CDialogDlg : public CResizableDialog

{
// Construction
public:
	CDialogDlg(CWnd* pParent = NULL);	// constructor

// Dialog Data

	enum { IDD = IDD_DIALOG_DIALOG };

protected:
        // DDX/DDV support
	virtual void DoDataExchange(CDataExchange* pDX);	

// Implementation
protected:

	HICON m_hIcon;

	// Generated message map functions
	virtual BOOL OnInitDialog();
	afx_msg void OnSysCommand(UINT nID, LPARAM lParam);

	afx_msg void OnPaint();
	afx_msg HCURSOR OnQueryDragIcon();

	DECLARE_MESSAGE_MAP()
};

Basically replace all instances of CDialog with CResizableDialog, except in CAboutDlg of course.

7. Add the dependencies needed to build the project. In Project Properties-> C/C++ -> General -> Additional Include Directories:

8. Finally, In OnInitDialog() add the extra initialization needed make the gripper visible, set maximum dialog size, add anchors to control items etc and we’re done.

// Initialize anchor points
AddAnchor(IDOK, BOTTOM_RIGHT);

AddAnchor(IDCANCEL, BOTTOM_RIGHT);
AddAnchor(IDC_EDIT1, TOP_LEFT, BOTTOM_RIGHT);

// Set max tracking size to half a screen
CRect rc;
GetDesktopWindow()->GetClientRect(&rc);
SetMaxTrackSize(CSize(rc.Width(), rc.Height()));

// Set max. position and size on top of the screen
rc.bottom = 200;
SetMaximizedRect( rc );

Example 2: Stack Overflow posting

Courtesy of Mark Ransom.  Some things things needed to use this class are:

1. Set your dialog style to include WS_THICKFRAME:

IDD_DIALOGRESIZE_DIALOG DIALOGEX 0, 0, 215, 178
STYLE DS_SETFONT | DS_MODALFRAME | DS_FIXEDSYS | WS_POPUP |
      WS_VISIBLE | WS_CAPTION | WS_SYSMENU | WS_THICKFRAME
EXSTYLE WS_EX_APPWINDOW
CAPTION "DialogResize"
FONT 8, "MS Shell Dlg", 0, 0, 0x1
BEGIN
    LISTBOX         IDC_LIST1,35,35,143,99,LBS_SORT |
                    LBS_NOINTEGRALHEIGHT |
                    WS_VSCROLL | WS_TABSTOP
END

2. Make your dialog class derives from the CResizableDialog base class:

// CDialogResizeDlg dialog
class CDialogResizeDlg : public CResizableDialog

3. In your InitDialog function call the AutoMove function for each child control to define how much it should move and how much it should resize relative to the parent dialog. Use this example to ‘stretch’ the dialog child controls from a fixed position:

AutoMove( IDC_LIST1, 0, 0, 100, 100 );

4. In the dialog class you are using (not the CResizable base class), replace all instances of CDialog with CBaseDialog.

Example VS2003 code downloadable from here.