The luminous infrared galaxy Arp299 (IC694+NGC3690) is studied using optical integral field spectroscopy obtained with the INTEGRAL system, together with archival Hubble Space Telescope WFPC2 and NICMOS images. The stellar and ionized gas morphology shows lambda-dependent variations due to the combined effects of the dust internal extinction, and the nature and spatial distribution of the different ionizing sources. The two-dimensional ionization maps have revealed an off-nuclear conical structure of about 4 kpc in length, characterized by high excitation conditions and a radial gradient in the gas electron density. The apex of this structure coincides with B1 region of NGC3690 which, in turn, presents Seyfert-like ionization, high extinction and a high velocity dispersion. These results strongly support the hypothesis that B1 is the true nucleus of NGC3690, where an AGN is located. In the circumnuclear regions HII-like ionization dominates, while LINER-like ionization is found elsewhere. The Halpha emitting sources with ages from 3.3 to 7.2x10^6 years, have masses of between 6 and 680x10^6 Msun and contribute (extinction corrected) about 45% to the bolometric luminosity. The ionized (Halpha) and neutral (NaD) gas velocity fields show similar structure on scales of several hundred to about 1 kpc, indicating that these gas components are kinematically coupled. The kinematic structure is complex and on scales of about 0.2 kpc does not appear to be dominated by the presence of ordered, rotational motions. The large velocity dispersion measured in NGC3690 indicates that this galaxy is the most massive of the system. The low velocity amplitude and dispersion of the interface suggest that the ionized gas is slowly rotating or in a close to quiescent phase.