  We show that there exists a consistent truncation of 11 dimensional
supergravity to the 'massless' fields of maximal (N=4) 7 dimensional gauged
supergravity. We find the complete expressions for the nonlinear embedding of
the 7 dimensional fields into the 11 dimensional fields, and check them by
reproducing the d=7 susy transformation laws from the d=11 laws in various
sectors. In particular we determine explicitly the matrix U which connects the
Killing spinors to the gravitinos in the KK ansatz, and the dependence of the
4-index field strength on the scalars. This is the first time a complete
nonlinear KK reduction of the original d=11 supergravity on a nontrivial
compact space has been explicitly given. We need a first order formulation for
the 3 index tensor field $A_{\Lambda\Pi\Sigma}$ in d=11 to reproduce the 7
dimensional result. The concept of 'self-duality in odd dimensions' is thus
shown to originate from first order formalism in higher dimensions. For the
AdS-CFT correspondence, our results imply that one can use 7d gauged
supergravity (without further massive modes) to compute certain correlators in
the d=6 (0,2) CFT at leading order in N. This eliminates an ambiguity in the
formulation of the correspondence.
