Learn Italian: Scusi, Lei è italiano? - Excuse me, are you Italian?

Scusi is the formal way to say excuse me. You use it when talking to adults you don't know well, like a stranger on the street. Scusa is the informal version you use with friends, family, and children.

Doesn't lei mean she? Why is it capitalized here?

You are right that lei means she. However, when it is capitalized as Lei, it becomes the formal word for you. It is used to show respect or keep a polite distance, and you can use it when talking to either a man or a woman.

If Lei means you, why does the sentence use è (is) instead of sei (are)?

In Italian, the formal you (Lei) always takes the he/she form of the verb. Because we use Lei, the verb must be è (the third-person singular form), rather than the informal sei.

Since the pronoun Lei is grammatically feminine, shouldn't the adjective be italiana?

Not unless you are talking to a woman! Even though the formal pronoun Lei looks feminine, any adjectives describing the person still match their actual gender. Because this sentence uses the masculine italiano, we know the speaker is asking a man.