Abstract We compare embedded young massive star clusters (YMCs) to (sub-)millimeter line observations tracing the excitation and dissociation of molecular gas in the starburst ring of NGC 1365. This galaxy hosts one of the strongest nuclear starbursts and richest populations of YMCs within 20 Mpc. Here we combine near-/mid-IR PHANGS–JWST imaging with new Atacama Large Millimeter/submillimeter Array multi-J CO (1–0, 2–1 and 4–3) and [C i] (1–0) mapping, which we use to trace CO excitation via R ₄₂ = I _CO(4−3)/I _CO(2−1) and R ₂₁ = I _CO(2−1)/I _CO(1−0) and dissociation via R _CICO = I _[CI](1−0)/I _CO(2−1) at 330 pc resolution. We find that the gas flowing into the starburst ring from northeast to southwest appears strongly affected by stellar feedback, showing decreased excitation (lower R ₄₂) and increased signatures of dissociation (higher R _CICO) in the downstream regions. There, radiative-transfer modeling suggests that the molecular gas density decreases and temperature and [CI/CO] abundance ratio increase. We compare R ₄₂ and R _CICO with local conditions across the regions and find that both correlate with near-IR 2 μm emission tracing the YMCs and with both polycyclic aromatic hydrocarbon (11.3 μm) and dust continuum (21 μm) emission. In general, R _CICO exhibits ∼0.1 dex tighter correlations than R ₄₂, suggesting C i to be a more sensitive tracer of changing physical conditions in the NGC 1365 starburst than CO (4–3). Our results are consistent with a scenario where gas flows into the two arm regions along the bar, becomes condensed/shocked, forms YMCs, and then these YMCs heat and dissociate the gas.