Sie liest eine geheime Nachricht.

The verb form tells you.

Here the verb is liest, which is 3rd person singular. That matches sie = she.

• sie liest = she reads
• sie lesen = they read
• Sie lesen = you read (formal)

So in Sie liest eine geheime Nachricht, Sie can only mean she.

A useful extra point: because Sie is the first word in the sentence, it is capitalized anyway, so capitalization alone does not help you here.

Because German verbs change form depending on the subject.

The infinitive is lesen = to read.
With sie meaning she, you need the 3rd person singular form:

• ich lese
• du liest
• er/sie/es liest
• wir lesen
• ihr lest
• sie/Sie lesen

So Sie liest is the correct form for she reads.

Also, lesen is one of those verbs where the stem vowel changes in the du and er/sie/es forms:

• e → ie
• lesen → du liest, sie liest

It is in the accusative case because it is the direct object of the verb liest.

In this sentence:

• Sie = the subject, the person doing the reading
• liest = the verb
• eine geheime Nachricht = the thing being read

A good question to ask is: What is she reading?
Answer: eine geheime Nachricht.

That makes it the direct object, so German uses the accusative.

Because Nachricht is a feminine noun: die Nachricht.

The indefinite article for a feminine singular noun is:

• eine in the nominative
• eine in the accusative

So in this sentence, even though the phrase is accusative, the article still stays eine.

Compare:

• ein Brief / einen Brief (masculine)
• eine Nachricht / eine Nachricht (feminine)
• ein Buch / ein Buch (neuter)

That is why you get eine geheime Nachricht.

Because German adjectives usually take an ending when they come before a noun.

The basic adjective is geheim = secret.
Before Nachricht, it becomes geheime.

Why -e here?

Because the noun phrase is:

• feminine
• singular
• accusative
• with the article eine

In that pattern, the adjective takes -e:

• eine geheime Nachricht

Compare some other forms:

• ein geheimer Brief
• eine geheime Nachricht
• ein geheimes Dokument

So the ending changes to match the grammar of the noun phrase.

Because in German, all nouns are capitalized.

So:

• Nachricht is capitalized because it is a noun
• geheime is not capitalized because it is an adjective
• liest is not capitalized because it is a verb

This is a general German spelling rule, not something special about this sentence.

No, this is a very normal German main clause.

The order is:

• Sie = subject
• liest = verb
• eine geheime Nachricht = object

So it follows the common subject–verb–object pattern, which looks very similar to English in a simple sentence like this.

A broader rule is that in a German main clause, the finite verb normally comes in second position.
Here that gives you:

Sie | liest | eine geheime Nachricht

In liest, the ie is pronounced like a long ee sound in English.

So liest sounds roughly like leest.

A few helpful pronunciation notes:

• ie in German usually = long ee
• liest rhymes closely with English least
• lesen has a different vowel sound from liest

So:

• lesen ≈ LAY-zen
• liest ≈ leest

This vowel change is part of the verb pattern, not just a spelling difference.

Yes. In German, it is very important to learn nouns together with their article.

So it is best to learn:

• die Nachricht = message/news/item of news

That helps you produce correct forms later:

• eine Nachricht
• die Nachricht
• eine geheime Nachricht

There are some gender patterns in German, but many nouns simply have to be learned individually. For this word, the safe habit is to remember die Nachricht, not just Nachricht.