Which sentence is correct?

Was the actor in the TV show Are You Afraid of the Dark? famous?
Was the actor in the TV show Are you Afraid of the Dark? famous?
Was the actor in the TV show "Are you Afraid of the Dark?" famous?

The correct sentence is: Was the actor in the TV show "Are you Afraid of the Dark?" famous?

Is the sentence are you afraid of the dark correct in italics?

Yes, the sentence "Are you afraid of the dark?" is correct in italics. To format it in italics, it should be written as *Are you afraid of the dark?*