Symmetry-adapted perturbation theory has been applied to compute the intermolecular potential energy surface of the Ne-CO complex. The interaction energy is found to be dominated by the first-order exchange contribution and the dispersion energy. The ab initio potential has a single minimum of epsilon(m) = -53.39 cm(-1) at R-m = 6.34 bohr and theta(m) = 92.2 degrees. The computed potential energy surface has been analytically fitted and used in converged variational calculations to generate bound rovibrational states of the Ne-20-CO complex and the infrared spectrum corresponding to the simultaneous excitation of vibration and internal rotation in the CO subunit within the complex. The computed frequencies of the infrared transitions corresponding to the Sigma --> Sigma, Sigma --> Pi, and Pi --> Sigma subbands are in good agreement with the experimental data (Randall, R. W., et al. Mol. Phys. 1993, 79, 1113). The observed bending combination band is assigned to the transitions from the ground state to the first excited Sigma state. Frequencies of the Pi --> Delta and Delta --> Pi transitions which were observed in the static cell spectrum are also reported.