Photometric and spectroscopic observations of the symbiotic binary AX Persei are presented. This system contains a red giant that fills its tidal lobe and transfers material into an accretion disk surrounding a low-mass main-sequence star. The stellar masses - 1 solar mass for the red giant and about 0.4 solar mass for the companion - suggest AX Per is poised to enter a common envelope phase of evolution. The disk luminosity increases from L(disk) about 100 solar luminosity in quiescence to L(disk) about 5700 solar luminosity in outburst for a distance of d = 2.5 kpc. Except for visual maximum, high ionization permitted emission lines - such as He II - imply an EUV luminosity comparable to the disk luminosity. High-energy photons emitted by a hot boundary layer between the disk and central star ionize a surrounding nebula to produce this permitted line emission. High ionization forbidden lines form in an extended, shock-excited region well out of the binary's orbital plane and may be associated with mass loss from the disk.