1. Do you think where he lives?

2. Where do you think he lives?
(#1 is incorrect. #2 is correct. Do you know why? Why is that?)

1 answer

When you add "do you think" to a question, you're subordinating the direct question to an indirect question. The verb in an indirect question and usually the word order must change from verb phrase and word order in a direct question.

Direct question: Where does he live?
Indirect question: Where do you think he lives?

http://grammar.ccc.commnet.edu/grammar/marks/question.htm#indirect
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