The development of polymer-modified asphalt (asphalt = asphalt binder) is significant because the polymer modifier can improve the performance of asphalt mixture and meet the requirements of the modern asphalt pavement. Herein, we present a novel polysiloxane-modified asphalt with enhanced performance, formed by simply mixing hydroxy-terminated polysiloxane (HO-PDMS) into base asphalt at 140 °C. The interaction mechanism of HO-PDMS in base asphalt was characterized by FT-IR, GPC, and DSC. It reveals that HO-PDMS polymers have been chemically bonded into the asphalt, and, thus, the resultant asphalt exhibits optimal compatibility and storage stability. The results based on fluorescence microscopy and a segregation test prove that HO-PDMS has good compatibility with base asphalt. Moreover, by virtue of the intriguing properties of polysiloxane, the present asphalt possesses improved low- and high-temperature properties, higher thermal stability, and enhanced hydrophobicity compared to conventional asphalt when using an appropriate dosage of HO-PDMS. DSC indicated that the Tg of modified asphalt (−12.8 °C) was obviously lower than that of base asphalt (−7.1 °C). DSR shows that the rutting parameter of modified asphalt was obviously higher than that of base asphalt. BBR shows that modified asphalt exhibited the lowest stiffness modulus and the highest creep rate with an HO-PDMS dosage of 6% and 4%, respectively. These results demonstrate that polysiloxane-modified asphalt can be promisingly utilized in realistic asphalt pavement with specific requirements, particularly high-/low-temperature resistance.