In this paper we systematize the real-space dynamic-renormalization-group method we developed elsewhere. We treat the two-dimensional kinetic Ising model with relaxational dynamics defined on a square lattice. We show how one can set up a systematic perturbation-theory expansion which treats the coupling between cells of spins as a small parameter. The novel feature of the expansion is that it provides a method for determining the appropriate effective interaction between spins in a set of uncoupled cells. By obtaining a good zeroth-order approximation for a set of uncoupled cells, one finds that the effective interaction between cells is reduced. Similar ideas are also applied to the dynamics of the problem and we indicate how one can obtain a good zeroth-order approximation in terms of the dynamics of uncoupled cells. We couple these perturbation theory ideas to the real-space dynamic-renormalization-group method and carry out explicit calculations of a variety of observable quantities including the magnetic susceptibility, specific heat, static structure factor, time-dependent spin-autocorrelation function, and the dynamic structure factor. In every case we obtain excellent results in keeping with the scaling behavior near the phase transition and the high-temperature limit.