  We present a detailed investigation of the X-ray and optical properties of
the starburst-merger system Arp299 (NGC 3690, Mrk 171), with an emphasis on its
spectacular gaseous nebula. We analyse \rosat and \asca X-ray data and optical
spectra and narrow-band images. We suggest that the on-going galaxy collision
has tidally-redistributed the ISM of the merging galaxies. The optical
emission-line nebula results as this gas is photoionized by radiation that
escapes from the starburst, and is shock-heated, accelerated, and pressurized
by a `superwind' driven by the collective effect of the starburst supernovae
and stellar winds. The X-ray nebula in Arp 299 is is plausibly a mass-loaded
flow of adiabatically-cooling gas that carries out a substantial fraction of
the energy and metals injected by the starburst at close to the escape velocity
from Arp 299. The mass outflow rate likely exceeds the star-formation rate in
this system. We conclude that powerful starbursts are able to heat (and
possibly eject) a significant fraction of the ISM in merging galaxies.
