The O-16(p, gamma)F-17 reaction rate is revisited with special emphasis on the stellar temperature range of T=60-100 MK, important for hot bottom burning in asymptotic giant branch (AGB) stars. We evaluate existing cross-section data that were obtained since 1958 and, if appropriate, correct published data for systematic errors that were not noticed previously, including the effects of coincidence summing and updated effective stopping powers. The data are interpreted by using two different models of nuclear reactions, that is, a potential model and R-matrix theory. A new astrophysical S factor and recommended thermonuclear reaction rates are presented. As a result of our work, the O-16(p, gamma)F-17 reaction has now the most precisely known rate involving any target nucleus in the mass A >= 12 range, with reaction rate errors of about 7% over the entire temperature region of astrophysical interest (T=0.01-2.5 GK). The impact of the present improved reaction rate with its significantly reduced uncertainties on the hot bottom burning in AGB stars is discussed. In contrast to earlier results we find now that there is not clear evidence to date for any stellar grain origin from massive AGB stars.