The most compelling explanation of what scripture means when it says that we are created in the image of God (the imago dei) is the human capacity for relationship with God. Of all distinctions between humans and other forms of life in earth, this seems to be the most unique. Of course, the capacity for relationship with God encompasses relationship with humans, language development, moral agency, and the ability to reason, for relationship with the divine requires all of these. But this is not why it is most compelling to me.
God exists in perfect relationship to himself. The Trinity is the perfection of God in relationship. To be God is to be in relationship. God does not exist outside of relationship. All animals have the capacity for relationship, but not all animals have the capacity for perfect relationship, and only humans have the capacity for perfect relationship with God. God created humans for the capacity to enter into the perfect relationship of God himself. To do this requires that humans have the capacity for perfect relationship (what I’ll call one-ness) with not only God, but with other beings as well.
Relationship with God required many other capacities. The capacity for moral agency is essential since God is moral and to have a relationship with him requires a moral decision. The capacity to reason is essential since God is intelligent and relationship with him requires thought. The capacity for language is essential since God communicates and a relationship with him requires communication.
Humans are created for the purpose of relationship with God. It is the most significant trait that distinguishes humans from all other creatures. God himself entered into a relationship with humankind, inviting humans to be one with him. The entire biblical narrative is the story of how God is restoring that relationship so that humans can fulfill their purpose. Unsatisfied with only relationships with other humans, historically we have intrinsically sought a relationship with the divine. This is our purpose. This is imago dei.