We present Goddard High-Resolution Spectrograph observations at 3.5 km s(-1) resolution and signal-to-noise ratios of 30 to 60 for the Al III, Si IV, C IV, and N V absorption lines in the far-ultraviolet spectrum of the 09.5 V star xi Ophiuchi. The measurement reveal three types of highly ionized gas along the 140 pc line of sight. 1. Narrow components of Al III (b = 4.3 km s(-1) [upsilon(helio)] = - 7.8 km s(-1) b = 3.2 km s(-1) [upsilon(helio)] = - 14.4 km s(-1)) and Si IV (b = 5.3 km s(-1), [upsilon(helio)] = -15.0 km s(-1)) trace photoionized gas in the expanding H II region surrounding xi Oph. The observed magnitude and direction of the velocity offset between the Al III and Si IV profiles can be explained by models of H II regions that incorporate expansion. Narrow C IV absorption associated with the H II region is not detected. Predictions of the expected amounts of Si IV and C IV overestimate the column densities of these ions by factors of 30 and more than 10, respectively. The discrepancy may be due to the effects of elemental depletions in the gas and/or to the interaction of the stellar wind with surrounding matter. 2. Broad (b = 15 to 18 km s(-1)) and weak Si IV and C IV absorption components are detected near [upsilon(helio)] = -26 km s(-1). The high-ionization species associated with these absorption components are probably produced by electron collisional ionization in a heated gas. This absorption may be physically related to the xi Oph bow shock or to a cloud complex situated within the local interstellar medium at d < 60 pc. The C IV to Si IV column density ratio in this gas is 8, a factor of 6 less than conductive interface models predict, but this discrepancy may be removed by considering the effects of self-photoionization within the cooling gas in the model calculations. 3. A broad (b = 13 km s(-1)) and weak C IV absorption feature detected at [upsilon(helio)] = -61 km s(-1) is not seen in other species. We tentatively ascribe this absorption to gas in a postshock region of an optically thin shock in the xi Oph stellar wind.