The problem of the hydrodynamic interaction of two unequal-sized spheres in a slightly rarefied gas is treated following the singular perturbation scheme of Sone & Onishi (1978), valid at small, but finite, particle Knudsen numbers. In this method the solution to the linearized BGKW transport equation governing the gas molecular motion consists of two parts: one describing a Knudsen layer where the actual microscopic boundary conditions are applied and the other describing a Hilbert region where the Stokes equations of continuum hydrodynamics hold. The Knudsen-layer solution establishes the ‘slip’ boundary conditions for the Stokes equations. Here we clearly distinguish between particle ‘slip’ due to the type of boundary conditions and particle ‘slip’ due to lengthscale effects as measured by the Knudsen number. The present analysis has been carried out to first order in particle Knudsen number for the case of diffuse reflective molecular boundary conditions. General relationships between the first- and zero-order velocity fields, both of which are written in the form of Lamb's (1932) solution to the Stokes equation, are established. It is illustrated how these general relationships can be used to determine the force and torque acting on a single sphere translating and rotating in a slightly rarefied gas. Finally, we have treated the two-sphere problem in a slightly rarefied gas using the twin multipole expansion method of Jeffrey & Onishi (1984). Here again, general relationships are established between the solutions of the first-order fluid velocity field and the zero-order velocity field, the latter being shown to recover Jeffrey & Onishi's results for stick boundary conditions. These general relationships are subsequently used to determine the complete resistance and mobility matrices of the two-sphere system. The symmetric properties of the resistance and mobility matrices are demonstrated for slip boundary conditions, in agreement with the general proof of Landau & Lifshitz (1980) and Bedeaux, Albano & Mazur (1977).