Published online by Cambridge University Press: 19 September 2008
We prove two extensions of Sacksteder's Theorem for the action A: Γ × S1 → S1 of a finitely-generated group Γ on the circle by C1+α-diffeomorphisms. If the action A has an exceptional minimal set K with a gap endpoint of exponential orbit growth rate, or if the action A on K has positive topological entropy, then the exceptional set K is hyperbolic. That is, A has a linearly contracting fixed-point in K. A key point of the paper is to prove a foliation closing lemma using the foliation geodesic flow technique.