We present CO (J = 1 --> 0) interferometry at 2.5'' resolution and Halpha CCD observations of the circumnuclear starburst region of the barred spiral galaxy NGC 3504. The CO emission is centrally peaked, extends over a region 16'' (1.6 kpc) in diameter, and is relatively azimuthally symmetric. The CO radial distribution is well fitted by an exponential with a scale length of 2.3'' (220 pc). This simple distribution is surprisingly unusual for the center of a galaxy. The velocity field is consistent with purely circular motions. Gas comprises approximately 40% of the dynamical mass within a radius of 100 pc (1''), if the '' standard '' CO-H-2 relationship is assumed. If isothermal and self-gravitating, the circumnuclear gas disk has a scale height of only 5-10 pc, and a spatially averaged proton density of 10(4) cm-3 at radii less than 300 pc. The rotation curve and the dust-lane morphology indicate the presence of an outer inner Lindblad resonance (OILR) at a radius of approximately 5'', and an inner inner Lindblad resonance (IILR) at a radius of approximately 2''. The starburst and most of the circumnuclear gas disk seem to be located between the OILR and the IILR. The maximum value of OMEGA - kappa/2 is nearly twice as large as the bar pattern speed of the large-scale bar, and the OILR and the IILR are well separated, and these may be important dynamical differences between NGC 3504 and nonstarburst barred galaxies. The rate of high-mass star formation per unit gas mass, as traced by the ratio of Halpha to CO emission, is uniformly high over the portion of the rotation curve which is nearly solid body, and drops by a factor of approximately 4 where the rotation curve turns over and flattens out. Since the CO radial distribution is not ringlike despite the fact that gas is being consumed more rapidly in the center, we believe that the starburst in NGC 3504 is in an early phase of its evolution. The Toomre Q stability parameter is approximately constant at 0.9+/-0.2 throughout the circumnuclear molecular gas disk, so the simple gravitational instability theory is consistent with ongoing star formation. The radial variation in the cloud growth timescale predicted from a Toomre instability is similar to the radial variation in the gas depletion timescale derived from the Halpha/CO ratio, although the timescales differ by a factor of approximately 10(3). Either star formation is surprisingly inefficient, or the cloud collapse timescale is longer than the instability growth timescale. We propose that the behavior of star formation for a given value of Q is strongly influenced by the strength of tidal shear, which can help control the star formation rate via the cloud destruction rate. In the central 300 pc of NGC 3504, where the rotation curve is nearly solid body and where the starburst is most intense, a lump of gas with Q congruent-to 1 has a density much greater than that which is susceptible to tidal shear. However, 400-600 pc from the center of NGC 3504, where the rotation curve is nearly flat, a lump of gas with Q congruent-to 1 has a density close to the range where tidal shear can shred it. A combination of tidal shear and gravitational instability theory can explain why starbursts evolve from the inside out, why evolved starbursts have rings of gas where the rotation curve turns over, and why star formation and the gas supply are regulated to maintain Q congruent-to 1 where rotation curves are nearly flat, but may be unregulated where rotation curves are nearly solid body.