Photoionization of the Xe atom and Xe@C60 molecule have been studied using the random phase approximation with exchange (RPAE) method. The Xe atom was described by relaxed orbitals including overlap integrals. The C60 fullerene has been represented by an attractive short range spherical well with potential V(r), given by V(r) = −V 0 for r i < r < r o , otherwise V(r) = 0 where r i and r o are respectively, the inner and outer radii of the spherical shell. The time independent Schrodinger equation was solved using both regular and irregular solutions and the continuous boundary conditions at r i and r o . The results demonstrate improvement to previous calculations for both the Xe atom and Xe@C60 molecule and compare very well with the recent experimental data.