The goal of this paper is to
prove the index theorem for the pairing of the Godbillon-Vey cyclic cocycle with the
index class of the longitudinal Dirac operator for a codimension one foliation. Let
(X,ℱ) be a foliated S1-bundle over an arbitrary spin manifold M. The Dirac
operator on M lifts to a longitudinal elliptic operator D, the longitudinal Dirac
operator, on (X,ℱ). The index class of D is an element of the K0-group of the
foliation C∗-algebra C∗(X,ℱ). A densely defined cyclic even-cocycle on C∗(X,ℱ),
the Godbillon-Vey cyclic cocycle, is constructed. The main result gives a topological
formula for the pairing of the Godbillon-Vey cyclic cocycle with the index class of D.
The proof of the main theorem uses a new technique, the pairing with the graph
projections.