We present new optical long-slit data along six position angles of the bulge region of M31. We derive accurate stellar and gas kinematics reaching 5-arcmin from the center, where the disk light contribution is always less than 30%, and out to 8-arcmin along the major axis, where the disk provides 55% of the total light. We show that the velocity dispersions of McElroy (1983ApJ...270..485M) are severely underestimated (by up to 50km/s). As a consequence, previous dynamical models have underestimated the stellar mass of M31's bulge by a factor of 2. As a further consequence, the light-weighted velocity dispersion of the galaxy grows to 166km/s and to 170km/s if rotation is also taken into account, thus reducing the discrepancy between the predicted and measured mass of the black hole at the center of M31 from a factor of 3 to a factor of 2. The kinematic position angle varies with distance, pointing to triaxiality, but a quantitative conclusion can be reached only after simultaneous proper dynamical modeling of the bulge and disk components is performed. We detect gas counter-rotation near the bulge minor axis. We measure eight emission-corrected Lick indices. They are approximately constant on circles. Using simple stellar population models we derive the age, metallicity and {alpha}-element overabundance profiles. Except for the region in the inner arcsecs of the galaxy, the bulge of M31 is uniformly old (>=12Gyr, with many best-fit ages at the model grid limit of 15Gyr), slightly {alpha}-elements overabundant ([{alpha}/Fe]~0.2) and of solar metallicity, in agreement with studies of the resolved stellar components. The predicted u-g, g-r and r-i Sloan color profiles match the dust-corrected observations reasonably well, within the known limitations of current simple stellar population models. The stellar populations have approximately radially constant mass-to-light ratios (M/L_R~4-4.5M_{sun}/L{sun} for a Kroupa IMF), which is in agreement with the stellar dynamical estimates based on our new velocity dispersions. In the inner arcsecs the luminosity-weighted age drops to 4-8Gyr, while the metallicity increases to above three times the solar value. Starting from 6-arcmin from the center along the major axis, the mean age drops to >=8Gyr with slight supersolar metallicity (~+0.1dex) and {alpha}-element overabundance (~+0.2dex) for a mass-to-light ratio M/L_R<=3M{sun}/L{sun}_. Diagnostic diagrams based on the [OIII]/H{beta} and [NI]H{beta} emission line equivalent widths (EWs) ratios indicate that the gas is ionized by shocks outside 10-arcsec, but an AGN-like ionizing source could be present near the center. We speculate that a gas-rich minor merger happened some 100Myr ago, causing the observed minor axis gas counter-rotation, the recent star formation event and possibly some nuclear activity.