[cont. from above] If you make the clause INDEPENDENT (alone as a question), the word order reverses, because the pronoun "what" becomes interrogative again: "What time is it?" You can also say, "What time is it? Do you know?" Here, you have TWO INDEPENDENT CLAUSES (sentences) and no dependent clauses (part of some other sentence).

Correct: "Do you know what time it is?" In a question, the verb is often placed (or begun) before the subject. In a statement, the order is usually subject-verb. The issue here is that you have a question that contains A DEPENDENT CLAUSE. A dependent clause is a group of words that has its own subject and verb which are not the main subject and verb of the sentence. The dependent clause here: "what time it is" This could be reworded as "It is [that] time," where "that" takes the place of "what" in the rewording. Grammatically, this CLAUSE is acting as the direct object of the question. It would be the same as saying this: "Do you know [THAT]?" -or- "Do you know [THE ANSWER]?" The question part, then, is "Do you know?" And you will see that the verb starts before the subject: subject: you verb: do know However, the clause "what time it is" is not a question; it is acting as a direct object. The confusion is that many INTERROGATIVE PRONOUNS (who, which, what) ... "WHO is that?" "WHICH do you like best?" "WHAT is your phone number?" ... are ALSO used as RELATIVE PRONOUNS that begin clauses: "The man WHO stole my wallet was arrested today.": "The man ... was arrested today." This is the main sentence clause. The clause "who stole my money" is NOT a question here, but rather a relative clause, acting as an adjective (telling which man). "He is now behind bars, WHICH makes me feel safer." Again, the main sentence is "He is now behind bars." The clause "which makes me feel better" is NOT a question, but a relative clause acting as an appositive the whole first sentence. "I know WHAT time it is." The main sentence is "I know [X]." The clause, "what time it is" is NOT a question, but rather a relative clause acting as the direct object. Now you can see why it does not change, even when the clause is part of a question: "You know what time it is." (statement) "Do you know what time it is?" (question) The clause does not change.

I mean no disrespect at all, Wozitoya, but I don't want there to be confusion over this. You have stated that "Do you know what time is it?" is correct; but it simply isn't correct, for the reasons I stated above. The CLAUSE to which "it is" belongs ("what time it is") is not a question; it is a relative clause that is PART of the question "Do you know [X]?" The question portion ("do you know?") has been reworded: "You do know." (statement) "Do you know?" (question) The word order of the relative clause ("what time it is") is not reversed in this case. Let's use another example. Imagine that I am asking this question: "Do you know how lucky you are?" I don't think anyone would say we should word this as "Do you know how lucky are you?" Yet, it involves the same components as the question "Do you know what time it is?" In a relative clause, the relative pronoun can be substituted with the word "that" when reworded as a stand-alone statement: "what time it is" . . . "It is [that] time." "how lucky you are" . . . "You are [that] lucky." The word order should remain the same in the relative clause as in its reworded counterpart using "[that]". More examples: "Have you decided which college you will attend?" (NOT "Have you decided which college will you attend?") "Will you tell me where we are going next?" (NOT "Will you tell me where are we going next?") Again, you can split this into TWO separate questions, and THEN the word order will be reversed in EACH: "Which college WILL YOU attend? Have you decided?" IF the question portion is set off with a comma and used in the sense of "Please, ...", THEN the next part becomes the MAIN question again, and it is reordered: "Do you know, what time is it?" (i.e., "Please, sir, what time is it?") "Could you tell me, where is the library?" ("Please, madam, where is the library?") But the comma is MANDATORY, and this construction should be avoided, if possible.

Erik's answer is correct.

The question always makes me confused.Teachers have told us if it is a special question,you should put the verb ahead the subject,like"what time is it?"or it is a complex special question,you should put the subject ahead the verb,like"do you know what time it is?" I think the answer of Erik is excellent.