We carefully reexamine the issues of solving the modified Bianchi identity,
anomaly cancellations and flux quantization in the S-1/Z(2) orbifold of M-
theory using the boundary-free "upstairs" formalism, avoiding several misco
nceptions present in earlier literature. While the solution for the four-fo
rm G to the modified Bianchi identity appears to depend on an arbitrary par
ameter b, we show that requiring G to be globally well-defined, i.e., invar
iant under small and large gauge and local Lorentz transformations, fixes b
= i. This value also is necessary for a consistent reduction to the hetero
tic string in the small-radius limit. Insisting on properly defining all fi
elds on the circle, we find that there is a previously unnoticed additional
contribution to the anomaly inflow from the eleven-dimensional topological
term. Anomaly cancellation then requires a quadratic relation between b an
d the combination lambda(6)/kappa(4) of the gauge and gravitational couplin
g constants lambda and kappa. This contrasts with previous beliefs that ano
maly cancellation would give a cubic equation for b. We observe that our so
lution for G automatically satisfies integer or half-integer flux quantizat
ion for the appropriate cycles. We explicitly write out the anomaly cancell
ing terms of the heterotic string as inherited from the M-theory approach.
They differ from the usual ones by the addition of a well-defined local cou
nterterm. We also show how five-branes enter our analysis. (C) 2000 Elsevie
r Science B.V. All rights reserved.