The correct answer is 'lives'.
Here's why:
* The subject 'a deer' is singular (one deer). Therefore, the verb needs to be in the singular form as well.
* 'Lives' is the third-person singular form of the verb 'to live'.
* 'Live' is the plural form and would be used with a plural subject (e.g., 'Deer live in the forest').
* 'Don't live' implies a negative statement, meaning the deer does not live in the forest, which doesn't fit the context.
So, the correct sentence is: A deer lives in the forest.