Try to stay awake for this one; I know that conjugating verbs is about as exciting as reading the tax code, but it’s important, and I hear these two verbs used incorrectly more often than I hear them used correctly.
Verbs have many moods and many conjugations (for example, past conditional, future progressive), but they are generally all based on the following conjugations: present, past, past participle, and present participle. For the sake of time—and sanity—I’ll just deal here with those basics (in that order for both lie and lay) because if you know them, then you can most likely conquer all conjugations.
The verb to lie means to rest or recline and is conjugated lie, lay, have/has lain (that’s right—lain), lying. He lies silently in his bed. Yesterday, I lay on the beach. The dog has lain on the couch many times. We are lying down.
The verb to lay means to put or to place and is conjugated lay, laid, have/has laid, laying. We lay the books on the desk when we’re finished reading. He laid the baby in the crib yesterday. He has laid the keys on the table every day this week. She was laying the book on the shelf as the telephone rang.
In order to avoid this grammar error, just remember that when you use the verb to lay, there should be an object after it—the thing that you are laying (putting or placing).