A new distributed coordination algorithm for multi-vehicle systems is presented in this paper. The algorithm combines a particular choice of navigation function with Voronoi partitions. This results not only in obstacle avoidance and motion to the goal, but also in a desirable geographical distribution of the vehicles. Our algorithm is decentralized in that each vehicle needs only to know the position of neighboring vehicles, but no other inter-vehicle communication or centralized control are required. The algorithm gives a natural priority to safety, goal convergence, and formation keeping, in that (1) collision avoidance is guaranteed under all circumstances, (2) the vehicles will move toward the goal as long as a given optimization problem is feasible, and (3) if prior criteria admit, the vehicles tend to a desirable lattice formation. These theoretical properties are discussed in the paper and the performance of the algorithm is illustrated in simulations with realistic models of twenty all-terrain vehicles. Planned experimental evaluation using customized miniature cars is also briefly described.