"Is she alive?" is the correct one, since "she's alive" is usually used as a positive sentence (a confirmation of her being alive).

'She's alive' is a statement, not a question. What you are actually saying is 'She IS alive!' 'Is she alive?' is the correct form for this question.

The correct question form involves the inversion of subject and verb. Unlike Spanish, the the affirmative form (She is) can't be used as an interrogative. To make a grammatically correct question form, you have to say 'Is she alive?'. However, in natural everyday speech, if you say 'She's alive?' with the appropriate rising intonation, it will be understood as a question. You might say this if you are very surprised, for example if you suddenly hear news of your 105-year-old great aunt whom you thought had died years ago. It isn't grammatically correct, strictly speaking, but it is acceptable. Another way you could make this into a question is if you said: 'She's alive, isn't she?' or even 'She's alive, right?'

correcto ...los dos