SU(2) gauged N=2 supergravity in d=8 is constructed by generalized dimensional reduction of d=11 supergravity on SU(2) group manifold. The relation between the field equations of the d=8 and those of d=11 supergravities is established. As a byproduct of this, it is shown that certain compactifications of d=11 supergravity give rise to anti-de Sitter space-time (AdS)S4 or AdSCP2 (with or without SU(2) instanton) or AdSS2S2 compactifications of d=8 supergravity. 1985.