We report the discovery of the inner edge of the high velocity CO outflow associated with the bipolar jet originating from IRS 1 in Barnard 5 and the first ever resolution of its circumstellar disk in the 2.6 mm dust continuum and C¹⁸O. From high spatial resolution observations made with the Owens Valley Millimeter Array we are able to locate the origin of the outflow to within ~500 AU on either side of IRS 1 and apparently at the edge of, or possibly within, its circumstellar disk. The orientation of the continuum disk is perpendicular to the highly collimated jet outflow recently seen in optical emission at much farther distances. The disk has been detected in C¹⁸O giving a disk mass ~0.16 M. Our HCO⁺ and HCN maps indicate significant chemical differentiation in the circumstellar region on small scales with HCO⁺ tracing an extended disk of material. The ¹²CO interferometer maps of the outflow show two conelike features originating at IRS 1, the blue one fanning open to the northeast and the red one to the southwest. The vertices of the cones are on either side of the circumstellar disk and have a projected opening angle of about 90°. The intrinsic opening angle is in the range of 60°-90° which leads to significant interaction between outflow and infall.