Positron scattering and annihilation on noble gas atoms is studied ab initio using many-body theory methods for positron energies below the positronium formation threshold. We show that in this energy range the many-body theory yields accurate numerical results and provides a nearcomplete understanding of the positron-noble-gas-atom system. It accounts for positron-atom and electron-positron correlations, including the polarization of the atom by the positron and the nonperturbative process of virtual positronium formation. These correlations have a large effect on the scattering dynamics and result in a strong enhancement of the annihilation rates compared to the independent-particle mean-field description. Computed elastic scattering cross sections are found to be in good agreement with recent experimental results and Kohn variational and convergent close-coupling calculations. The calculated values of the annihilation rate parameter Z eff (effective number of electrons participating in annihilation) rise steeply along the sequence of noble gas atoms due to the increasing strength of the correlation effects, and agree well with experimental data.