A many-body-theory approach has been developed to study positronium-atom interactions. As first applications, we calculate the elastic scattering and momentum-transfer cross sections and the pickoff annihilation rate ^{1}Z_{eff} for Ps collisions with He and Ne. For He the cross section is in agreement with previous coupled-state calculations, while comparison with experiment for both atoms highlights discrepancies between various sets of measured data. In contrast, the calculated ^{1}Z_{eff} (0.13 and 0.26 for He and Ne, respectively) are in excellent agreement with the measured values.