  We report sub arc-second resolution X-ray imaging-spectroscopy of the
archetypal type 2 Seyfert galaxy NGC 1068 with the Chandra X-ray Observatory.
The observations reveal the detailed structure and spectra of the 13 kpc-extent
nebulosity previously imaged at lower resolution with ROSAT. The Chandra image
shows a bright, compact source coincident with the brightest radio and optical
emission; this source is extended by \simeq 1.5 arcsec (165 pc) in the same
direction as the nuclear optical line and radio continuum emission. Bright
X-ray emission extends \simeq 5 arcsec (550 pc) to the NE and coincides with
the NE radio lobe and gas in the narrow line region. The large-scale emission
shows trailing spiral arms and other structures. Numerous point sources
associated with NGC 1068 are seen. There is a very strong correlation between
the X-ray emission and the high excitation ionized gas seen in HST and
ground-based [O III] \lambda 5007 images. The X-rays to the NE of the nucleus
are absorbed by only the Galactic column density and thus originate from the
near side of the disk of NGC 1068. In contrast the X-rays to the SW are more
highly absorbed and must come from gas in the disk or on the far side of it.
This geometry is similar to that inferred for the narrow line region and radio
lobes. (Abstract truncated).
