In this paper we consider orbifold compactifications of M-theory on S-1/Z(2) x T-4/Z(2). We discuss solutions of the local anomaly matching conditions by twisted vector, tensor and hypermultiplets confined on the local orbifold six-planes. In addition we consider phase-transitions among different solutions which are mediated by M-theory fivebranes which touch the local orbifold planes and are converted there to gauge instantons. (C) 2000 Elsevier Science S.V. All rights reserved.