A new six-dimensional interaction potential for the water dimer has been obtained by fitting interaction energies computed at 2510 geometries using a variant of symmetry-adapted perturbation theory (SAPT) based on density functional theory (DFT) description of monomers, referred to as SAPT(DFT). The stationary points, second virial coefficient, vibration-rotation-tunneling spectrum, and structure of liquid water computed with the new potential are in very good agreement with experiment and advanced ab initio calculations, confirming the high level of accuracy provided by SAPT(DFT). (c) 2006 American Institute of Physics.