We combine high-resolution spectroscopic data from APOGEE-2 survey Data Release 16 (DR16) with broad band photometric data from several sources, as well as parallaxes from Gaia Data Release 2 (DR2). Using the Bayesian isochrone-fitting code StarHorse, we derive distances, extinctions and astrophysical parameters for around 388,000 APOGEE stars, achieving typical distance uncertainties of ∼ 11% for APOGEE giants, ∼ 5% for APOGEE dwarfs, as well as as well as extinction uncertainties of ∼ 0.07mag, when all the photometric information is available. StarHorse uncertainties vary with the input spectroscopic catalogue, with the available photometry, and with the parallax uncertainties. The value-added catalog generated here was compared to the asteroseismic CoROGEE catalogue (for which distances and extinctions are also updated according to the new DR16 spectroscopic inputs) showing good agreement, but suggesting smaller parallax shifts in the mid plane fields with respect to those found in the Kepler field. To illustrate the impact of the new StarHorse results we show an analysis of the chemical spatial dependency of Galactic plane stars. Thanks to Gaia DR2 and the now larger coverage of APOGEE-2 (including APOGEE-south) we obtain an extended map of the Galactic plane, now reaching the inner-most parts of the Galaxy and providing an unprecedented coverage of the disk close to the Galactic mid-plane. The distance and extinction improvements unveil the presence of the bar in a density diagram, as well as the striking chemical duality in the innermost regions of the disk, now clearly extending to the bulge. For the first time we are able to have a much less fragmented view of our Galaxy. We complement this paper with distances and extinctions for stars in other public released spectroscopic surveys: