A new ab initio potential energy surface for the ground state of the NO-NO system has been calculated within a reduced dimensionality model. We find an unusually large vibrational dependence of the interaction potential which explains previous spectroscopic observations. The potential can be used to model vibrational energy transfer, and here we perform quantum scattering calculations of the vibrational relaxation of NO(v). We show that the vibrational relaxation for v = 1 is 4 orders of magnitude larger than that for the related O(2)(v) + O(2) system without having to invoke nonadiabatic mechanisms as had been suggested in the past. For highly vibrationally excited states, we predict a strong dependence of the rates on the vibrational quantum number as has been observed experimentally, although there remain important quantitative differences. The importance of a chemically bound isomer on the relaxation mechanism is analyzed, and we conclude it does not play a role for the values of v considered in the experiment. Finally, the intriguing negative temperature dependence of the vibrational relaxation rate constants observed in experiments was studied using an statistical model to include the presence of many asymptotically degenerate spin-orbit states.