A compact basis set is constructed for the water dimer by focusing directly on an optimal description of the counterpoise-corrected interaction energy (Delta E) rather than on the total energy of the fragments. The optimization criterion is that the basis set should be of uniform accuracy, i.e., the truncation error in Delta E due to the basis set incompleteness should be the same for all symmetry types at all sites. Aiming at a truncation error of 10 mu hartree per symmetry at the SCF+MP2 (self-consistent field+Moller-Plesset second-order) frozen core level the resulting interaction optimized basis set comprises 249 functions. The composition of this IO249 set is O/5s3p4d3f2g1h, H(donor)/2s4p1d, H(else)/2s3p, bond function set/3s3p2d1f. An all-electron variant, IO275, is described as well. A recipe to obtain interaction optimized sets for other systems is given. The set IO249 yields a Delta E(fc) value at the Feller-Frisch geometry of -4.87 kcal/mol. Of the many orbital-based calculations that have been reported for this system only Schutz' 1046-function calculation [J. Chem. Phys. 107, 4597 (1997)] was more accurate. The small size of the interaction optimized sets opens the possibility for high-accuracy SCF+MP2 work on larger systems than have been accessible before. It also brings higher-level correlated treatments within reach. An Appendix summarizes two additivity rules which allow the Delta E for a larger basis set to be estimated to very high accuracy from the results of smaller basis sets.