We analyze radial and azimuthal variations of the phase balance between the molecular and atomic interstellar medium ( ISM ) in the Milky Way using archival CO ( J =1-0 ) and HI 21cm data . In particular , the azimuthal variations – between spiral arm and interarm regions – are analyzed without any explicit definition of spiral arm locations . We show that the molecular gas mass fraction , i.e. , f _ { mol } = \Sigma _ { H _ { 2 } } / ( \Sigma _ { HI } + \Sigma _ { H _ { 2 } } ) , varies predominantly in the radial direction : starting from \sim 100 \% at the center , remaining \gtrsim 50 \% ( \gtrsim 60 \% ) to R \sim 6 { kpc } , and decreasing to \sim 10 - 20 \% ( \sim 50 \% ) at R = 8.5 kpc when averaged over the whole disk thickness ( in the midplane ) . Azimuthal , arm-interarm variations are secondary : only \sim 20 \% , in the globally molecule-dominated inner MW , but becoming larger , \sim 40 - 50 \% , in the atom-dominated outskirts . This suggests that in the inner MW , the gas stays highly molecular ( f _ { mol } > 50 \% ) as it goes from an interarm region , into a spiral arm , and back into the next interarm region . Stellar feedback does not dissociate molecules much , and the coagulation and fragmentation of molecular clouds dominate the evolution of the ISM at these radii . The trend differs in the outskirts , where the gas phase is globally atomic ( f _ { mol } < 50 \% ) . The HI and H _ { 2 } phases cycle through spiral arm passage there . These different regimes of ISM evolution are also seen in external galaxies ( e.g. , the LMC , M33 , and M51 ) . We explain the radial gradient of f _ { mol } by a simple flow continuity model . The effects of spiral arms on this analysis are illustrated in the Appendix .