  We present the analysis of the interstellar gamma-ray emission measured by
the Fermi Large Area Telescope toward a region in the second Galactic quadrant
at 100 deg < l < 145 deg and -15 deg < b < +30 deg. This region encompasses the
prominent Gould-Belt clouds of Cassiopeia, Cepheus and the Polaris flare, as
well as atomic and molecular complexes at larger distances, like that
associated with NGC 7538 in the Perseus arm. The good kinematic separation in
velocity between the local, Perseus, and outer arms, and the presence of
massive complexes in each of them make this region well suited to probe cosmic
rays and the interstellar medium beyond the solar circle. The gamma-ray
emissivity spectrum of the gas in the Gould Belt is consistent with
expectations based on the locally measured cosmic-ray spectra. The gamma-ray
emissivity decreases from the Gould Belt to the Perseus arm, but the measured
gradient is flatter than expectations for cosmic-ray sources peaking in the
inner Galaxy as suggested by pulsars. The Xco=N(H2)/W(CO) conversion factor is
found to increase from (0.87 +- 0.05) 10^20 cm^-2 (K km s^-1)^-1 in the Gould
Belt to (1.9 +- 0.2) 10^20 cm^-2 (K km s^-1)^-1 in the Perseus arm. We derive
masses for the molecular clouds under study. Dark gas, not properly traced by
radio and microwave surveys, is detected in the Gould Belt through a correlated
excess of dust and gamma-ray emission: its mass amounts to ~50% of the
CO-traced mass.
