A new ab initio interatomic potential energy curve for two ground-state xenon atoms is presented. It is based on supermolecular calculations at the coupled-cluster level with single, double, and perturbative triple excitations [CCSD(T)] employing basis sets up to sextuple-zeta quality, which were developed as part of this work. In addition, corrections were determined for higher coupled-cluster levels up to CCSDTQ as well as for scalar and spin-orbit relativistic effects at the CCSD(T) level. A physically motivated analytical function was fitted to the calculated interaction energies and used to compute the vibrational spectrum of the dimer, the second virial coefficient, and the dilute gas transport properties. The agreement with the best available experimental data for the investigated properties is excellent; the new potential function is superior not only to previous ab initio potentials but also to the most popular empirical ones.