  We consider compactifications of the matrix model of M-theory on
$S^1/Z_2\times T^d$ for $d>0$, and interpret them as orbifolds of the
supersymmetric U(N) Yang-Mills theory on $R\times T^{d+1}$. The orbifold group
acts both on the gauge group and on the $T^{d+1}$, reduces the gauge group to
O(N) over 1+1 dimensional fixed-point submanifolds, and breaks half of the
supersymmetry. We clarify some puzzling aspects of the gauge anomaly
cancellation in the presence of space-time Wilson lines; in general, the
Yang-Mills theory requires certain Chern-Simons couplings to supergravity
background fields. We discuss the possibility that D8-branes are present as
certain matrix configurations in the Yang-Mills theory, and the fundamental
fermions emerge as zero modes. Finally, we point out that the correspondence
between matrix theory and string theory suggests the existence of a multitude
of non-trivial RG fixed points and dualities in orbifold Yang-Mills theories
with eight supercharges in various dimensions.
