Collision-induced light scattering spectra of gaseous xenon at room temperature are analyzed in terms of different literature and new interatomic potentials and interaction-induced pair polarizability anisotropy and trace models. At low frequencies the spectral intensities and the associated moments are determined by both bound and free transitions. The spectra at intermediate and high frequencies are sensitive to both the attractive part of the potential and to short-range values of the anisotropy or trace polarizability. An empirical interatomic potential for the gaseous xenon interaction is developed by simultaneously fitting the Barker et al. (BFW) and modified Tang-Toennies (MTT) potentials to spectroscopic and thermal properties over a wide temperature range. The quality of the present potentials was checked by comparison between the calculated and experimental transport properties at different temperatures. The results show that these are the most accurate potentials reported to date for xenon gas. Similarly, the combination of these potentials with our analytical models of xenon polarizability is satisfactory for both the reproduction of spectral moments and spectral line shapes of the xenon collision-induced spectra.