We study effects associated with the chiral anomaly for a cascading $SU(N+M)\times SU(N)$ gauge theory using gauge/gravity duality. In the gravity dual the anomaly is a classical feature of the supergravity solution, and the breaking of the U(1) R-symmetry down to ${\bf Z}_{2M}$ proceeds via the Higgs mechanism.

15 pages, derivation of vector mass corrected, main conclusions unchanged, a sign convention changed in section 4