We investigate a (0,2) gauge theory realized on the world-volume of the type IIB D1-brane at the singular point of a Calabi-Yau four-fold. It is argued that the gauge anomaly can be canceled via coupling to the R-R chiral bosons in bulk IIB string. We find that for a generic choice of the Fayet-Iliopoulos parameters on the world-volume, the Higgs moduli space is a smooth four-fold birational to the original Calabi-Yau four-fold, but not necessarily a Calabi-Yau manifold.